The old shareholders of Buffalo have been generously compensated for the public shell. Per the merger agreement with Aladdin, these shareholders retained 406,099 shares of the common stock of the new ADDN, currently trading at $3 per share. Total value: $1,218,297. Additionally, certain of the Buffalo shareholders received $125,000 as payment for the Class A and Class B warrants that were outstanding prior to the acquisition of Aladdin. Total compensation: $1,343,297.
What was the total investment on the part of the old Buffalo shareholders? Including stock issued as compensation for services: $49,890. 4,500,000 shares valued at $25,400 issued as compensation for services. 120,000 shares sold for cash for a total of $7,500. Additionally, it appears that certain of the Buffalo officers picked up expenses totaling $16,990. These expenses were appropriately booked as paid-in-capital. When you consider that Buffalo was not incorporated until September 1997, this represent a rather hefty return.
All this for a company that never had any operations. It also appears that the stock of Buffalo never actually traded. Per the PREM14C, "Although Buffalo's Common Stock is approved for trading, no reported transactions have occurred, and as a result, there are no bid or ask prices to report." |
