What are the potential financial and dilution effects of the pending Acquisition Proposal on current shareholders?

Financial impact

The Acquisition Proposal is being placed on hold only for a final NASDAQ “adjourn‑and‑re‑file” review; the company has said that its day‑to‑day operations, ongoing financing activities and the closing of the merger with Streamex Exchange Corp. will continue unchanged. In practice, the proposal will most likely be financed by issuing new equity (or convertible securities) to the target’s shareholders. When that equity is issued, the existing share base will expand, diluting earnings per share (EPS), book‑per‑share and any cash‑per‑share metrics that current investors currently track. The incremental capital, however, is expected to fund the strategic synergies outlined in the merger—‑‑e.g., broader product exposure, cross‑sell opportunities and a larger balance‑sheet—that could lift top‑line growth and improve long‑term cash‑flow coverage. The net effect on valuation will therefore hinge on whether the incremental earnings and cash generation from the combined entity outweigh the mechanical dilution created by the new shares.

Dilution and trading implications

For current shareholders, the immediate risk is the uncertainty premium that the pending filing creates. Markets typically price‑in the probability of a dilutive share issuance by widening the bid/ask spread and inducing heightened volatility. If the deal proceeds at the announced consideration, existing shareholders will see a modest increase in total shares outstanding—potentially 10‑15 % depending on the final exchange ratio—so their ownership stakes will be proportionally reduced. Conversely, if the transaction delivers higher‑than‑expected operating margins or revenue expansion, the share price could appreciate despite the dilution, offsetting the immediate per‑share hit.

Actionable take‑away

Watch for the next SEC filing or press release that confirms the final exchange ratio and the mix of cash vs. equity in the consideration. A clear ≥ 10 % rise in the share count should be back‑tested against pro‑forma EPS and cash‑flow models to gauge whether the post‑merger valuation still offers a discount to comparable peers. Until the final terms are disclosed, a defensive stance— tight stop‑loss around the current support level (≈ $2.70) and a short‑term “buy‑the‑dip” play if the price falls > 5 % on the filing—can help manage the dilution‑risk exposure while preserving upside if the combined entity’s fundamentals justify a premium.