CCEE Breaking Out Message Board

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Microcap & Penny Stocks : CCEE Breaking Out

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To: Dr. Moze who wrote (7547)	10/31/1997 1:41:00 PM
From: Dr. Moze	Read Replies (2) of 12454

A bit more CCEE Proxy Math: With shareholder approval of a 1-10 reverse split AND the additional 150M shares authorized (a likely scenario for management-supported proxy issues), CCEE would then be able to DILUTE the present shareholders' equity by a factor of *TWENTY-NINE!!! That's 300M POST-SPLIT authorized shares, less the 10M or so post-split shares already issued. The authorization of 150M shares combined with a 1-10 split is simply an authorization to issue 1.5 BILLION new shares of the current stock. Sounds crazy but it is spelled out in the proxy in black and white. Pages 42-44. Note in the table on p. 42 that the right-hand column ("Authorized and Unissued Common Stock (After Reverse Stock Split)" represent post-split* shares. Multiply these by the reverse-split ratios (i.e., 2 to 10) to get the equivalent number of current ('Old') shares that this corresponds to. BTW, this math doesn't even include the preferred stock issue, which is essentially a blank signed check for the management to issue preferred stock AND DEFINE THE CONVERSION RATE TO COMMON STOCK as they see fit. The proxy statement goes to great length to emphasize (repetitively) in each reverse-split ratio proposal (pages 17-42!) that effecting any of the reverse splits will not alter the "par value" of Common Stock ($0.0001 per share!), nor will it affect the percentage ownership of any security owner. What they fail to say (except indirectly in the tables on p. 42-44) is that such a reverse split will permit the company to DILUTE the shareholders' equity SIGNIFICANTLY through the resulting major increase in authorized but unissued post-split shares. They do also state (p. 49, and maybe elsewhere to cover their asses more completely) that "Common Stock is authorized to be issued in [sic] the discretion of the Board of Directors without Stockholder approval of each issuance." I think I see CCEE's real business plan now. And it doesn't involve selling/licensing d.b.Express for a profit.... Hope this helps some of you folks with your own homework. Comments?

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