Corporate Restructuring Case Study

A small public company had become stagnate and was faced with losing its public listing.

Problem:

The Founder and CEO of the Company had made bad decisions in the course of two years of operations due to his inexperience in the public market. Share price was down to pennies and financing of the Company was impossible due to the corporate structure. Management, shareholders, and stakeholders were at odds to a solution to turn the Company around. Microcap Advisors was contacted by the CEO and a major stakeholder to review the situation and offer recommendations.

Microcap Advisors Involvement:

Microcap Advisors did an initial assessment after reviewing the public filings, current shareholder list, and corporate structure including; articles of incorporation, bylaws and resolutions passed by the Board of Directors. Microcap also reviewed the financials of the Company, including all major contracts, liabilities, and debt. The business was solid and on the verge of generating revenue but needed financing to continue operations past the short term.

Microcap Advisors Solution

After an analysis, assessment and review of the Company by Microcap Advisors, resulting in a corporate restructuring plan, the Board of Directors agreed to put it in place. In order to accomplish the restructuring Microcap Advisors was designated the lead and prepared all documents, resolutions and oversaw all filings while working with the Company's SEC attorney. Microcap Advisors became the liaison between management, major shareholders, and stakeholders.

Results

The Company was able to transition into the restructuring recommended by Microcap Advisors. As a result the Company rolled back its share structure, brought in new management, and clearly addressed the financial issues of the Company. Financing was achieved through new investors by a private placement. Microcap Advisors continued as an advisor to the Board of Directors.