CPI Aerostructures Consummates Offering of 2,300,000 Common Shares
PR NEWSWIRE - February 19, 2003 11:54
EDGEWOOD, N.Y., Feb 19, 2003 /PRNewswire-FirstCall via COMTEX/ -- CPI Aerostructures, Inc. (Amex: CVU) reported today that it has consummated its public offering of 2,300,000 of its common shares at a purchase price of $4.00 per share, which includes the exercise in full of the underwriter's over-allotment option for 300,000 common shares. The offering was underwritten by EarlyBirdCapital, Inc.
The net proceeds of the offering will be approximately $7,764,000. CPI has used approximately $2,423,000 of the net proceeds to repay bank loans and $2.7 million to repurchase a promissory note held by a third party in the principal amount of $4 million. The remaining approximately $2.6 million of net proceeds will be used for working capital. This will leave CPI no material bank debt and a net worth of approximately $12 million.
In January 2003, some of CPI's officers were interviewed by a reporter and an article about CPI was subsequently published. It is possible that CPI's officers' participation in the interview combined with the publication of the article may be considered a violation of Section 5 of the Securities Act of 1933, as amended. If investors in this offering were to sue CPI and convince a court that CPI violated Section 5, they would have the right under the federal securities laws to rescind their purchases of common shares for a period of one year from the date of the violation. Alternatively, if the investors already sold their shares they would have the right to receive damages to the extent the price they paid CPI for the common shares exceeded the price at which they sold them. Accordingly, CPI might be required to return to certain investors all or part of their purchase price and the net proceeds to CPI would be correspondingly reduced. If every investor were to pursue and prove a claim that CPI violated Section 5, the maximum potential liability to CPI could be the entire gross proceeds of the offering. |
