Wow. The following financial tap-dance also appears to be a slick trick to kill shorts and screw over manipulators......:
CDAL - interesting stuff, they want to elliminate all holders of less than 1,000 shares.
As presented in Proposal No. 1, the Board of Directors has authorized and unanimously recommends that the Shareholders approve a reverse 1 for 1,000 stock split followed immediately by a forward 1,000 to 1 stock split of the Company's common stock. A summary of the terms of the Transaction is as follows:
? The purpose of the Transaction is to cash out Shareholders holding less than one thousand (1,000) shares of common stock in a record or nominee account at 6:01 p.m. on ________, 2002 (the "Effective Time"); the Transaction is being undertaken at this time in order to provide small, unaffiliated shareholders with an economic means of liquidating their shares, as well as reducing the Company's expense of compliance with federal securities laws, (For additional information, see discussion in the section entitled "Reasons for Transaction", page 14;
? The ratio for the reverse split is one (1) share for every one thousand (1,000) shares beneficially owned at the Effective Time; (For additional information, see discussion in section entitled "Structure of the Transaction on page 15;
? Shareholders who are cashed out will receive $0.25 for each share beneficially owned the moment before the Effective Time; the Directors believe that the purchase price is fair, as it is higher than the fair market value determined by an appraisal received by the Company. (For additional information, see discussion in section entitled "Affect of the Transaction on Company Shareholders" at page 18;
? The Transaction must be approved by a majority of the shares of common stock including shares owned by Shareholders who are affiliated with the Company as officers, Directors or employees;
? If the Transaction is approved, then the Company intends to file a certification of termination of registration of its common stock with the Securities and Exchange Commission and the Company will cease to be a reporting company; Officers, Directors and holders of 10% or more of the outstanding shares of common stock also will not be subject to other provisions of federal securities law. (For additional information, see section entitled "Effect on Shareholders" at page 13 and "Affect of the Transaction on Company" page 20;
? The Transaction, if approved, will not have any material effect upon Shareholders beneficially owning one thousand (1,000) or more shares of the Company's common stock; the Directors determined on January 28, 2002 that $0.25 per share was a fair purchase price. (For additional information, see section entitled "Effect on Shareholders at page 18.
? If the Transaction is approved, small Shareholders (thereafter referred to as Cashed-Out Shareholders) will have dissenter appraisal rights under Idaho law; a Cashed-Out Shareholder, however, must have sent a notice to the Company prior to the meeting and not voted for the Transaction. (For additional information, see section entitled "Dissenter's Appraisal Rights" on page 24.
The purpose of the Transaction is to eliminate the cost associated with administering a large number of shareholder accounts with fewer than 1,000 shares. As an alternative, the Company has offered several programs allowing shareholders to tender their shares to the Company, but has had limited success in reducing the total number of accounts with small holdings. The Company will benefit as a result of a substantial cost savings (approximately $43,500 each year) and the small shareholders will benefit from the ability to cash out their holdings without incurring a sales expense. The current "market" value is $0.12 per share and any associated sales fees would be deducted before the funds would be remitted to the shareholder. There will be no material effect on the remaining shareholders, whether affiliated or unaffiliated. The only detriment to the Company and remaining shareholders will be the cost associated with the Transaction, which is likely to be approximately $36,000 including the cash-out of the shareholders holding fewer than 1,000 shares. This cost will not impair or restrict the Company's ongoing business and the Company, as well as the remaining shareholders, will benefit in future years from the annual cost reduction. All shareholders have received very little benefit from the "public market" for the stock, as there has been very limited activity since 1993. The Cashed-Out Shareholders will not be harmed as the net cash to the shareholder exceeds proceeds available from sale in the open market. The price of $0.25 per share is more than twice what is currently available on the open market. Small shareholders who are cashed out will be subject to the capital gains tax rules in effect at the time of the Transaction. Mr. Coulson and the Company have chosen this time for this Transaction because it is required by operating losses to find ways to cut the expense load while still maintaining operations at a level that will allow the Company to participate in a market recovery.
Hope the idea catches on........!!
John :-)
. |
