Cape Coastal Trading has filed an 8-K.
The company currently has 19,388,333 shares outstanding, of which 2,666,667 are subject to a possible redemption. The shareholders of uBid received 8,800,000 Cape Coastal common shares and the old shareholders of Cape Coastal received 599,333 shares. A total of 10,000,000 new shares were sold to investors at $4.50 per share. The company may sell another 3,000,000 at the same price.
CMGI acquired uBid in April 2000 (recording $367 million of goodwill) and sold it on April 2, 2003:
On April 2, 2003, CMGI sold substantially all of the assets and non-related party liabilities of uBid to Takumi Interactive, Inc., an investment vehicle of Petters Group, which changed its name to uBid, Inc. immediately after the acquisition. As a result of the transaction, uBid became a separate stand-alone business owned substantially by the Petters Group. In consideration of the asset sale, Takumi paid CMGI (1) $1,612,500 in cash at closing, (2) a promissory note in the aggregate principal amount of $2,000,000, bearing interest at the prime rate plus 1.5%, payable in two equal installments on the first and second anniversaries of the closing, and (3) a warrant to purchase non-voting common stock of uBid constituting 5% of the outstanding common stock of uBid on the consummation of the business sale.
Ubid has never made a dime:
Year ending July 31, 2001
Revenues: $436.2 million
Loss: $144.7 million
Year ending July 31, 2002
Revenues: $386.0 million
Loss: $192.4 million
Eight months ending March 31, 2003
Revenues: $103.5 million
Loss: $135.0 million
Change of ownership
Nine months ending December 31, 2003
Revenues: $66.7 million
Loss: $1.0 million
Year ending December 31, 2004
Revenues: $87.0 million
Loss: $6.4 million
Nine months ending September 31, 2005
Revenues: $67.0 million
Loss: $2.9 million
The dramatic drop in sales during the year 2003 resulted from the cessation of most promotional expenditures by CMGI.
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