I am a little leery of the circumstances in this case. In the press release related to the CEO Clips to be aired on the Biography channel, it says that there are 471mil shares, and that they have $5 million in working capital. Not sure what the burn rate is, but that seems enough to get through the summer season, by which time we could expect an offer from someone for the Big Daddy property.

There is also a deadline for the consolidation of 31 Dec 2010. Which means that if we approve the proposal, they intend to enact it, sooner rather than later. I would like to know what the BOD considers 'favourable' market conditions...

One thing that I read between the lines is that there might not be an offer in the near future. If they think that they need to raise funds without further dilution, it would appear that the BOD believes that the SP will remain where it is. Otherwise, they could raise $10mil through flow-through PP which would only add 20mil shares (~5% of current) if the SP were at $0.50 as a result of a Big Daddy buyout. To raise that kind of capital at a $1.40 SP due to consolidation would mean dilution of 7mil shares (~15%), or 1/3 that if there is a buyout offer at $5.