IMON - Quoted from Barron's Corporate Reports Message Board

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Technology Stocks : IMON - Quoted from Barron's Corporate Reports

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To: Jeff who wrote (864)	1/22/1999 5:00:00 PM
From: Tibor	Read Replies (1) of 2220

What a scheme? The management deserves to be congratulated. The former company, California Pro Sports, was close to bankruptcy and delisting last year. It practically ceased operations and recorded zero sales. Based on last year's 12m outstanding, the market cap was around $12m. Then, seeing the internet hype, they find a small software developer, ImaginOn, with no sales but products in the pipeline. The software developer was probably trying, unsuccessfully in my opinion, to go public on its own. Then California offers to buy ImaginOn in exchange for 60% of the new combined company, thus effectively making a backdoor IPO for ImaginOn. In the process the shares outstanding grow, with non of the offered shares going back to the company. So how do they plan to finance operations when they have negative cash flow? Obviously it is not their concern. But based on today's market cap, the guys from ImaginOn are worth north of $120m and the shareholders of Calif Pro Sport over $80m (vs. last year $12m) Is this legal???

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