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CSMG Technologies Inc. (CTGI-Pink Sheets) Announces Restructuring Plan, Informal Shareholders Meeting on September 10, 2010
Corpus Christi, TX (PRWEB) August 25, 2010
The officers and directors of CSMG Technologies, Inc., issue the following information, concerning the Company’s current status, and plans for each of its subsidiaries in the months ahead.
CSMG Technologies, Inc. â Current Status
Since the untimely death last December of the Company’s former CEO, Don Robbins, the Board of Directors has been extremely busy. CSMG had been underfunded for quite some time, and a number of outstanding obligations were pressing. Over the ensuing months, board members have devoted many man-hours towards correcting these deficiencies. Management has been able to negotiate settlements for the bulk of these obligations, some for small cash payments but mostly for stock. At this moment, the Company is not aware of any outstanding or pending claims by outside parties that could pose a threat to CSMGâs existence. Each of the directors has invested personal funds in CSMG. No officers or directors have drawn any salary during this time, and certain service providers have assisted CSMG without receiving any compensation. Monthly operating overhead has been reduced to about $ 15,000 per month, down from a former high exceeding $ 300,000 per month. This is obviously a âsurvivalâ budget – it is anticipated that a normal monthly operating budget will be $ 40,000-$ 50,000. Once the accounting/audit work for Live Tissue Connect, is completed (which should be done within the next two weeks), Managment will then proceed to complete a similar audit to bring CSMGâs books up to date, and immediately reapply for trading on the OTC Bulletin Board. Much of the work required for the LTC audit will also apply to the CSMG audit, so this should expedite its completion.
Live Tissue Connect, Inc. â Current Status
An accomplished and experienced team of managers has been retained to take the reins at LTC. This team has been to Ukraine to meet with the inventors of the technology and observe actual human surgeries, and is ready to assume full operating control of LTC with assistance provided by CSMGâs underwriter.
Carbon Capture Technologies, Inc. â Current Status
Due to the demands on the officers and directors as stated above, Management’s main focus has not centered on CCTI over the past few months. Last month, however, a U.S. patent for the solid amine technology (developed at the University of Ottawa, Canada) was issued, which gives the Company a much stronger intellectual property position than the prior âPatent Pendingâ status. Fees to ensure the continued registration of applicable patents, both in the United States and abroad are paid and up to date. ADA Environmental Services, Inc. is continuing to test CSMGâs solid amine compound as a possible tool to extract CO2 from coal-fired stack gases, and results from a larger scale test are expected within several months. The Company is constrained from releasing any specific details by a non-disclosure agreement, but preliminary testing results have been extremely encouraging. Management plans to pursue this business opportunity very aggressively once CSMG has access to additional funds, as this technology, should it prove successful on an industrial scale, offers the potential, in our view, to be a very valuable asset.
CSMG Technologies, Inc. â Next Phase
After consulting with the Company’s investment banker and the new management team for LTC, the Board of Directors is considering a combining of LTC and CSMG, whereas LTC may acquire the assets of CSMG, and become the surviving entity in the public company. This action, should it be done, will enable the investment banking company to assist LTC to pursue its business plan as quickly as possible. Under such a plan, the Company would have an entirely new (and proven) management team, largely a new board, and a new name (probably Live Tissue Connect, Inc., but not decided as yet), in order to better convey the pure play it is in the medical equipment business. There would remain some payables and obligations to complete, but none, to the Company’s knowledge, that should be a threat to the ânewâ company, assuming the funding goes as planned. There will be as an offset, however, the retention of a tax loss carry-forward of approximately $ 20 million that Management believes would remain with LTC, and much of this can be used to offset taxes on future earnings. While the percentage of ownership by CSMG of LTC would be considerably reduced under this scenario, Management thinks the current owners of CSMG shares would still realize a substantial benefit once the ânewâ company begins to trade under the new name and as its own entity.
Should the plan above become reality, the remaining asset of CSMG, being Carbon Capture Technologies, Inc. (âCCTIâ), is targeted to be spun off as a separate public company. The current CSMG shareholders would receive a dividend in the form of shares in this new entity. Mr. K. Bruce Jones, current Chief Financial Officer of CSMG and CEO of CCTI, would remain as CEO of that company, and relinquish any position with the re-formed LTC. The plan for the ânewâ CCTI is to build a new technology holding company, to find and acquire promising technologies that have the capability to become major factors in their respective markets. There is one major difference, however, in the business model as it was practiced under Mr. Robbins and the old CSMG. That is, while it is exciting to consider the potential of finding another âLTCâ, Mr. Jones and his team prefer to first find and acquire a company with an operating history, one that has a predictable stream of revenues and cash flow. The plan, therefore, is to acquire such a company from private owners, one that has established revenues and free cash flow that exceeds $ 1 million yearly. The Company can then add several small but promising âincubatorâ situations that may have the potential to become a major factor in a national or global market, given some time and nurturing. This may not be as exciting as starting out solely with incubator companies (with no prospects of near-term revenues) but Management believes this strategy will be less risky for the investor and will provide greater share value over the long term. Several possible candidates are identified, and the field is being narrowed now. CSMG’s investment banker has also given his nod of approval for this approach for CCTI, and while there is no firm commitment to raise funds, an engagement letter with his firm for that purpose has been signed.
Finally, Management will hold an informal meeting of the shareholders on Friday evening, September 10, from 7 to 8 PM, at the Embassy Suites Hotel in Corpus Christi. The purpose of the meeting will be to both explain the actions anticipated above, and to introduce shareholders to new management, in both LTC and CCTI. Lodging is available at the Embassy Suites is (361) 853-7899. Also, anyone planning to attend should RSVP to Ms. Chris Bailey at 361 248-4444, or by email at: csmg(dot)admin(at)gmail(dot)com, so the Company can plan accordingly.
Contact:
K. Bruce Jones,
Chief Financial Officer
(770) 955-0409
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