I bought shares of Kobex Capital in a registered account on Friday after the company announced the results of its substantial issuer bid.
Vancouver, British Columbia — June 8, 2016 — Kobex Capital Corp. (TSX-V:KXM) (the “Company” or “Kobex”) announced today the results of its substantial issuer bid to purchase for cash and cancellation up to 40,809,178 common shares of Kobex (the “Kobex Shares”) at a price of $0.655 per Kobex Share (the “Offer”).
The Offer expired at 5:00 p.m. (Toronto time) on June 6, 2016. Based on the report dated June 7, 2016 provided by the depositary in respect of the Offer, 25,820,761 Kobex Shares had been deposited as at the expiration of the Offer (and not withdrawn).
Pursuant to the terms of the Offer, Kobex has taken up 25,820,761 Kobex Shares at a price of $0.655. The aggregate consideration for the Kobex Shares taken up and accepted for purchase and cancellation by the Company is $16,912,598.46. Payment for such Kobex Shares will be made as soon as practicable following take-up by the Company and otherwise in compliance with the Offer. Kobex Shares not validly deposited under the Offer will be returned to the applicable shareholders as promptly as possible.
The Kobex Shares to be purchased under the Offer represent approximately 54.20% of the Kobex Shares issued and outstanding as of June 6, 2016. After such purchase, approximately 21,810,626 Kobex Shares will remain outstanding.
This leaves Kobex with …
- Approximately 21,810,626 shares outstanding (based on the press release)
- Aproximately $35-million in tax-loss carry forwards that I’m valuing at a value of $4.5-million
- Approximately $14,995,434.54 in remaining cash after the exercise of options. I got this value by using the cash balance from their last quarterly, adding the cash from exercised options that were tendered in the SIB and subtracting the $16.9-million used to pay for the tendered shares.
Assuming you believe my back of the napkin math above, that leaves Kobex with 69 cents in net cash and a net asset value of 89 cents when the tax loss carry forwards are factored in. Now that Kingsway Financialhas taken over management of the company, I believe they’ll find a way to put the tax losses to use. Even if they don’t, my downside is limited to about 10% since it’s protected by the cash value per share.
