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Microcap & Penny Stocks : KAFE (Country Star Restaurants)
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To: Robert L.Stone who wrote (65)5/30/1997 5:57:00 PM
From: wfrazee   of 876
 
It seems the writing on the wall might be to get the 250M shares approved then do the 1 for 10 reverse split. That should bring authorized shares back to 25M; however, due to the financial bind this company is in, I would expect we (the shareholders) will lose 20 to 50% of our value just on the reverse split. Then, once new shares start hitting the market, we'll see further dilution until the company gets healthy. If I could attend the meeting, my questions would be - why management feels it's necessary to authorize so many more shares rather than say maybe 50M? Also, why does management feel a 1 for 10 reverse split will be in shareholder's best interests when small valued shares such as this one typically lose value after reverse splits.

I also noticed in the 8K the company did some Reg S financing. As you probably already know from other threads, when has Res S financing ever benifited shareholders? Why didn't they use the line of credit Dan Rubin made available when he took over the company. Is he now afraid to risk additional money in the future of this company? After all, he's one of the first in line to get his money back if the company folds.

I know what the long term stragetic plan states for the company - can they give us a short term plan that tells us how we plan to get profitable?
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