Avasoft, Inc. (OTCBB:AVAF) purveyor of a patented, innovative soft-serve ice cream system to the estimated $6 billion combined U.S. and United Kingdom soft-serve marketplace, today commented on the recent unusual trading activity in its common stock.
The Company's float of free tradable common stock has been increased recently from approximately 180,000 shares to 14 million shares and this is believed to be causing the current volatility in the market for its common stock. Avasoft notes that its business update and outlook for profitability in the third quarter of this year -- as detailed in its March 6 Special Letter to Shareholders -- remains current and solidly on track.
The enactment of revisions to Rule 144, promulgated under the Securities Act, became effective February 15, 2008 enabling non-affiliate Avasoft stockholders to sell their shares freely after six months, subject only to the current public information requirement, and without restriction after one year.
This Rule 144 change also coincides with the Company's one-year anniversary as a public company February 13, 2008, upon which many of approximately 14 million of the Company's 22 million shares issued one year ago become available for sale in the public market; a quarter of these shares were issued directly for the Company's merger or financing over one year ago and have a low or zero cost basis. This 14 million-share float compares with a float of approximately 180,000 shares that were freely tradable prior to mid February.
Avasoft believes this dramatically increased supply of freely tradable shares has created selling pressure on the market for the Company's common stock causing unusual volatility. The Company is consulting with its investor relations firms and investment banker on solutions to create greater liquidity and restore balance to the market for its common stock.
About Avasoft, Inc.
Headquartered in Rocklin, California, and through its wholly owned Ezee Whip Europe, Ltd. subsidiary, Avasoft sells an innovative soft-serve ice cream system into an estimated $6 billion combined U.S. and U.K. soft-serve ice cream marketplace. This patented system, for which it owns marketing rights in Europe and North America, has earned widespread success in several European markets for the last five years. Please visit Avasoft online at www.avasoft.com.
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Forward Looking Statement
This news release includes forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. While these statements are made to convey to the public the company's progress, business opportunities and growth prospects, readers are cautioned that such forward-looking statements represent management's opinion. Whereas management believes such representations to be true and accurate based on information and data available to the company at this time, actual results may differ materially from those described. The company's operations and business prospects are always subject to risk and uncertainties. Important factors that may cause actual results to differ include without limitation: the Company's limited operational experience; ability to raise financing; market acceptance of the Company's ice cream products; dependence on suppliers including Schoep's, and in turn, their suppliers, distributors and providers of raw materials; dependence on license partners; market prices of raw materials such as milk, sugar, and other ingredients; continued enforceability of patent rights; and competition. Many of these risk factors are set forth in the company's periodic findings with the U.S. Securities and Exchange Commission.