9/27/2014

Deep Value Nano Cap + Reallocating Cash + Recent Convincing Insider Buys




CadusCorp. (KDUS): Long time value trap has changed over the prior 2 quarters. The company will now take its box of cash to purchase residential properties for purposes of investment, renovation or construction and resale. KDUS has $20m-$30m of NOLs.


Recent insider buys

Aug 19, 2014
10,000
Direct
Purchase at $1.51 - $1.55 per share.
15,000
Jun 6, 2014
ICAHN CARL CBeneficial Owner (10% or more)
12,563,840
Indirect
Option Exercise at $1.53 per share.
19,222,675


Current price = $1.57
Market Cap: 41.27M  Enterprise Value: 20.64M
Price/Book (mrq):1.00
Total Cash (mrq): 20.63M , Total Cash Per Share (mrq):0.79 
No Debt,  Book Value Per Share (mrq):1.61
52-Week Change:  5.37%
52-Week High (Jul 2014):$1.89  52-Week Low(Apr,2014):$1.41
Shares Outstanding: 26.29M ,Float: 6.78M

% Held by Insiders:    63.30% ,% Held by Institutions:    7.60%


Taken from the most recent 10Q:

“In connection with the Company’s program to purchase residential properties for purposes of investment, renovation or construction and resale, as of August 14, 2014, the Company has purchased for an aggregate of approximately $23.3 million, and continues to own through an indirect wholly-owned subsidiary, ten residential properties in Miami-Dade County, Florida. Of these, eight properties had existing homes on them and two properties were vacant lots. In addition, as of August 14, 2014, the Company, through wholly-owned subsidiaries, has entered into a binding contract for the purchase of a vacant lot in Miami-Dade County, Florida for $3.2 million and has entered into a contract for the purchase of a vacant lot in East Hampton, New York for $3.1 million. The contract for the East Hampton, New York property may be terminated by the Company at any time on or prior to August 18, 2014. The closings under both contracts are currently anticipated to occur in late August 2014. The Company does not currently intend to purchase additional properties following these closings until it has begun to sell renovated or newly constructed homes from its existing inventory of properties. To date, with the exception of the contract to purchase the East Hampton property, the Company has concentrated its real estate activities in Miami-Dade County, Florida.

With respect to the Company’s existing inventory of properties, three existing houses are under renovation and five others are being demolished. The Company is the process of engaging architectural firms with respect to the properties undergoing demolition as well as for its vacant lots.

In addition to its real estate activities, Cadus will continue to consider acquisitions or investments in various industries.

The Company conducted a rights offering for the issuance of up to 13,144,040 shares of its common stock pursuant to its S-1 filing with the Securities and Exchange Commission that became effective April 28, 2014. In connection with the rights offering, the Company distributed to the holders of its common stock non-transferable subscription rights to purchase up to 13,144,040 shares of its common stock at $1.53 per share. Effective June 6, 2014, all 13,144,040 shares available in the offering were subscribed and the company received gross proceeds of $20,110,381, less offering costs of approximately $263,500.

At June 30, 2014, the Company had an accumulated deficit of approximately $37.8 million. The Company’s losses have resulted principally from costs incurred in connection with its former drug discovery research and development activities and from general and administrative costs associated with the Company’s operations. These costs have exceeded the Company’s revenues and interest income. As a result of the sale of its drug discovery assets and the cessation of its internal drug discovery operations and research efforts for collaborative partners, the Company ceased to have research funding revenues and substantially reduced its operating expenses. The Company expects to generate revenues in the future only if it is able to profit from its real estate operations.”

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