JerryB: Not to worry. As CTGI would retain majority ownership (51% or more) of new IPO (LTC), the asset value accruing to CSMG would be significant, perhaps, very significant. Arguably, that's one of the premises of the IPO not to mention the millions of IPO dollars flowing to CSMG coffers. Furthermore, when LTC is profitable, cash dividends might redound to CSMG shareholders. Finally, any party wishing to takeover LTC would be forced to acquire with CSMG's stake and its agreement. Here is one scenario discussed by the company in 2006:
"It is the intent of management and Empire Financial Group to qualify Live Tissue Connect, upon going public, for listing on a major board, either NASDAQ or the American Stock Exchange. This would infer a price of $5 per share for the IPO, and if we sold a total of two million shares, for a total of $10 million, this would result in approximately 17 million shares of LTC outstanding, or a market valuation at about $85 million. At that point, CSMG would own 12.9 million of the 17 million shares outstanding in LTC, or almost 76%. At a market price of $5 per share, this would immediately add about $64.5 million of shareholder value to CSMG. Assuming CSMG has approximately 35 million shares outstanding at the time of the IPO, this would boost CSMG shareholder book value to approximately $2 per share. If CSMG stock were to sell at book value, which is a very conservative valuation, this would reflect an increase of over 500% from the current market price for our stock.
It is important to note that we plan to sell shares in LTC, with only a warrant transaction in the parent company, or CSMG as described below.
Importantly, in preparation for the IPO of LTC, the underwriter has agreed to raise, on a best efforts basis, at least $3 million in a bridge financing for CSMG. The offer consists of a note that will convert, at a discount to the initial offering price, into shares of LTC, and significantly, have no dilution to CSMG shareholders. The proceeds from this financing will give the Company needed working capital in the interim, fund the LTC FDA filings and allow CSMG to pay off some debt obligations in the process. Additionally, note holders receive three (3) year warrants for up to 50% of the amount of his note, and interest that is convertible to CSMG common stock, with an exercise price that is to equal to 120% of CSMG's common stock price upon the Maturity Date of the Note. There is a 5% underwriter's warrant attached to the note offering that allows the placement agent to purchase shares of both CSMG and the IPO, priced at the market price on the date of closing of the transaction."
News 
Market Data 
Discover 
AI
