I just spoke to Prima Capital, IR firm for KANA. Didn't get|
to speak to anyone at KANA.
Prima told me that the company did make a 504 placement for
approximately 1.5 million shares to raise the capital of $1
million ($0.75/share). Some shares were sold above that and
some were (are being) sold at lower levels. Prima says the
sale is over and they raised the capital they needed.
There are no more 504 placements. There is going to be a
release explaining this early next week.
This placement makes the outstanding shares 11.5 million and
the float 4.5 million (previously 3 million).
Prima thinks this is the bottom level we will see for KANA.
The value has been diluted by the 504 offering and now it
shoud turn around as the newly raised capital is used to expand
This is the info I got.
Although it is common for BB companies, the company should have
told investors about the coming 504 offering. Ones who got the
shares at high prices suffer the most because of dilution, but
hopefully the company will invest the new capital appropriately
to raise the shareholder value.
For new buyers, this might be an opportunity to buy in, although
I don't know at what level this is going to bottom out (it has been
around this level for a while now, so I believe it has bottomed out).
When KANA calls me back, I am going to ask several questions
including: (1) how they are going to use the new capital;
(2) how much they are paying to Prima (stock or cash);
(3) why they did not take credits for building the business
instead of a 504 placement; (3) why they offered 504 without
informing the investors (many BB companies do that, but I will
ask anyway), and other "future prospects" questions.
Overall, this is a good level to buy (watch it and see if it still
goes down), but I think it was unfair for the investors who bought
it at high levels > $1,$2
Decide for yourselves, call the company (800-831-2671) or Prima
(800-600-8599). Also wait for the news next week.