Now that the restructuring of financial information services company Knobias (OTCBB: KNBS) has been completed, many people are wondering what the restructuring will mean to the company. When the company’s principal creditors – chief among them CAMOFI, otherwise known as Centrecourt Asset Management – announced that it would begin examining the ailing company about how best to restructure it, there was much concern about what would happen to Knobias.According to Smithline founder and influential micro-cap pioneer Robert Smithline, who had time for a brief interview with Market News First, CAMOFI plans on “injecting new capital, new management, a new board and taking it to the next level.”
While Smithline only had a brief comment for Market News First on the restructuring of Knobias, CAMOFI Managing Director Carl Kleidman gave Market News First a better explanation of what was happening at Knobias, and how the company was dealing with it.
“The company’s known for months that the restructuring is taking place,” Kleidman said in an exclusive interview. “It’s not like this is new – they ran out of cash at the beginning of the year, and … all the debt-holders and preferred stockholders got together to figure out a restructuring plan that made sense for the company, which the company has been intimately involved with. So they’ve known for the last several months that this was in the works, and they’re certainly involved with it. To be honest, it’s the last couple of months where the [disturbance] has been [the worst] because people weren’t sure if it was happening, or exactly when it was going to close, and there’s more lethargy when that is trying to be put together. I think now things will start moving forward with the company.
“I can’t talk about the full management until the new [members] get in there, but the CEO has resigned and a new CEO has been appointed,” Kleidman continued. “As for any other changes, they will play out over time. There’s nothing else planned for the moment.”
For those not in the know, Knobias is a financial information services company with a long history of providing top-quality services to its customers – and a more recent history of financial insolvency and plunging stock prices. In 2005, the company’s stock showed up on the OTC Bulletin Board and started spiraling down the drain, dropping from $3 a share to less than 10 cents a share in the span of a year. Since then, rumors of gross corporate and financial mismanagement have dogged the company, leaving potential investors cold to Knobias’ offerings and current investors high and dry.
Kleidman hopes that this restructuring can help change that. By injecting some new capital and bringing in new management, CAMOFI intends to “make Knobias bigger and better than what it was,” according to Kleidman.
“There will be a new CEO, there will be some new board members … everybody’s looking to move the company forward,” Kleidman said. “We intend to improve the content, expand the content, and, most importantly, get back out there and try to increase the footprint of the product in the financial community.”
Some of these changes go as far as affecting the Knobias stock. According to a press release sent out yesterday, CAMOFI owns approximately 33 percent of Knobias’ outstanding capital stock, while the holders of the new Series B Preferred Stock own approximately 50 percent, while the holders of the company’s common stock own approximately 7.3 percent. By doing this, CAMOFI can help Knobias during this difficult time without infringing on the services Knobias provides.
“It’s not a purchase, nobody’s buying it out,” Kleidman explained. “It’s just a restructuring, which means the existing debt and equity holders agree to certain restricting of their current holdings, namely the debt was converted into equity, and we’ve made a new investment to the company which has bought us that 33 percent stake.
“But we didn’t buy the company, we don’t control the company, we don’t operate the company – from this point forward, there’s a new board being put in place, which is full of independent board members who have no affiliation with us, and a new CEO is being put in place who, again, has no affiliation with us. This is not like somebody bought it – CAMOFI did not buy Knobias. Knobias is still an independent public company, and is going to be managed by an independent board of directors and a new management team.”
