Besides split ratios and its reasons supporting possible R/S, two other noteworthy items in 14A include PESI's discussions to obtain a 3-year, $3M loan and its plan NOT to reduce 75M authorized shares in conjunction with a R/S. What will the $3M be used for? Will the 800,000 shares and warrants issued with the loan pre- or post-split?
I particularly liked the statement about the Board needing additional capital to implement its planned growth. Wonder what planned growth they're thinking about. If PESI is able to raise capital through negotiated loans and has not articulated a growth strategy, why increase authorized shares with the R/S and recommend putting s/h in a position to be diluted and discourage possible takeover interest?
Just my opinion but it may mean they are running out of cash, and that the second quarter was not likely cash flow positive but rather ate cash again. The $3 million may be nominally projected to support growth initiatives, but I bet it is there to "buy time" until year-end in the hope that the Sequester gets revised to be less severe or that some contract work gets awarded. I think management saw what I saw---one more quarter anything like the first quarter and they would be pretty much cooked. The $3 million would allow some cushion to forestall that. Problem is the Sequester on a grand scale has been the most positive thing to come out of Washington in over a decade. I think it will stay in place until 2021.