Pro rata liquidating distribution
The Company expects such interim liquidating distribution to be paid on or about July 26, 2017.With respect to additional liquidating distributions, Delaware law requires that we pay or make provision to pay all of our liabilities and obligations, including contingent and conditional liabilities, claims that are subject to pending litigation involving the Company and certain claims that have not arisen or are unknown but that are likely to arise or become known in the future.The term "pro-rata" has several applications in small and large businesses, such as cost allocation and distribution of liquidation proceeds.Pro-rata reduction usually refers to dilution of ownership interests and the impairment of fixed assets.Companies usually test for asset impairment annually.Impairment means that the book value of an asset is greater than its recoverable value, which is the higher of its net selling price and its value in use.
The pro-rata reduction for the equipment is ,400, which is 17 percent multiplied by ,000.
The Company’s principal non-cash assets consist of its investment in FA Technology Ventures, L. The Company plans make additional distributions at such times as is deemed appropriate, depending upon facts and circumstances existing at the time.
Although our Board of Directors has not adopted a timetable for further liquidating distributions, subject to contingencies inherent in winding up our business, the Board of Directors intends to make such distributions as promptly as practicable, subject to the requirements of Delaware law.
As businesses grow, they need to find new sources of funding, one of which may involve bringing in new investors.
This could result in ownership dilution, which means that the original owners would experience a pro-rata reduction in their individual ownership.