Current Price – $0.008;
Offer Price – $0.04 (for holders of up to 2499 shares);
Upside – $80 or 400% (for holders of up 2499 shares);
Expiration date – TBD;
I like the risk/reward on this deal – one stands to gain $80 by putting down $20. So even if the transaction is cancelled, the losses are only $20 and if it goes through the profit will be $80.
I also believe the likelihood of this deal going through is quite high – no shareholder approval required and the amount to by out odd lots is very low. Beneficial owners of more than 50% of the stock are supportive of the transaction.
To accomplish the reduction in the number of record holders of the Stock, the Company will effect a one-to-2,500 reverse stock split of its outstanding common and preferred Stock, whereby each 2,500 shares of common and preferred stock outstanding as of the effective date of the reverse stock split will be converted into one whole share of stock (the “Reverse Stock Split”). Because only one shareholder owns any of the company’s preferred stock, the reverse stock split only affects those shareholders with fractional shares of common stock. In lieu of issuing any fractional shares to stockholders as a result of the Reverse Stock Split, the Company will make a cash payment to shareholders holding a fractional share equal to $0.04 per pre-split share.
Source of Funds:
The current number of shares of our common stock outstanding is 322,723,652. Of those shares, 174,591 will be affected by the Reverse Stock Split, which constitutes approximately .054% of the total outstanding shares. The Company estimates that the total funds required to consummate the Transaction will be approximately $47,000. Approximately $6,983.64 of this amount will be used to pay the consideration to Discontinued Stockholders entitled to receive cash for their fractional shares of our common stock in the Reverse Stock Split and approximately $40,000 will be used to pay the costs of the Transaction. The Company expects to pay the costs of the Transaction, including the amounts to be paid to stockholders holding fewer than 2,500 shares of our common stock, out of currently available cash.