CRDS shares had accumulated a lot of demand already before the market opened and started trading 6.67% higher than Friday’s close. Within the session, the total gain over the day was 17.33% and the share price hit a new 52-week highest value at $0.98 and closed at $0.88. The trading volume was also corresponding to the gained traders’ interest: almost 340,000 shares were traded.
The reason was the announced $10 million equity financing and although the company is generally not seeking much of publicity the news obviously reached the market. Just like all the other corporate updates, that last one was also published only on Crossroads’ website. Unfortunately, Crossroads is not filing current financial reports with the SEC either and respectively the announced deal cannot be confirmed yet. There is also no official detailed data about the company’s business. A published on the OTC markets page quarter report for the periods ended this July contains only some numbers saying that the business is not profitable, but no interpretation of the results.
According to the announcement about the private placement, the company has sold 12.5 million shares of common stock at a price of $0.8 each and warrants to purchase another 4.3 million shares also at $0.8 to a group of institutional investors led by a British Virgin Islands-based mutual fund manager. As part of the deal, Crossroads has also agreed to arrange the listing of its common shares on the OTCBB or NASDAQ over the next year.
Traders did not get bothered by the fact that the company has also agreed to register the shares at some time in the future, nor by the changes in the ownership structure. According to the OTC homepage, Crossroads had at the end of July 30.4 million common shares outstanding and the stake of the new investors given they also exercise the warrants will be 35.6%.
