Farpoint Goes Below 5% on Cadus Corp

The Reporting Persons acquired the Company’s shares in the belief that the shares were undervalued.  On January 22, 2014, the Company announced it was entering a new line of business concurrent with the announcement of the acquisition of residential real estate in Florida.  As a result, the Reporting Persons sold a small number of shares in the open market to reduce the exposure to real estate while waiting for additional disclosure from the Company.

The Reporting Persons may from time to time and at any time, acquire additional shares.  They reserve the right to dispose of any or all of their securities in the open market or otherwise, at any time and from time to time, and to engage in any hedging or similar transactions with respect to the securities.

Here is the language in the 8-K dated 1/22/2014:

Item 1.01    Entry into a Material Definitive Agreement. 

On January 15, 2014, a wholly-owned indirect subsidiary of Cadus Corporation (the “Company”), MB 2013, LLC, as buyer, became obligated, pursuant to a contract entered into as of December 19, 2013, as amended, to purchase a residential property from the property’s individual owners in Florida, for a purchase price of $3,450,000, with the closing to take place on or before February 4, 2014. Following the closing, the Company will file an additional current report on Form 8-K. 

Item 8.01    Other Events. 

The Company has been seeking to use all or a portion of its available cash, and where appropriate, seek additional debt or equity financing, to acquire or invest in one or more companies or other assets. Although the Company has identified the real estate opportunity described below, it will continue to consider other acquisitions or investments.

The Company believes that there may be opportunities to profit from purchasing land and residential homes in areas of the United States where there may be population gains and increases in real estate value. In that connection, beginning in the fourth quarter of 2013, Cadus’ Board of Directors began to explore such opportunities in Florida and determined that the Company enter into a new line of business and seek to purchase individual homes or individual residential lots for purposes of renovation or construction and resale.

Depending on the availability of transactions acceptable to the Company, all or a portion of the Company’s available cash may be utilized in the Company’s new line of business, and the Company may seek debt or equity financing. However, as stated above, the Company will continue to consider other acquisitions or investments in various industries. The Company may also continue to maintain and seek to license or sell its drug discovery technologies, but this will no longer be a focus of the Company’s business plan. 

In connection with its new line of business, the Company, through an indirect wholly-owned subsidiary, is currently party to four contracts entered into in the ordinary course to purchase existing residential homes in Florida. The Company’s subsidiary has the right to terminate each of these contracts in its sole discretion during an inspection period before the particular contract becomes binding upon the subsidiary. On January 15, 2014, the inspection period expired on one of these contracts without termination by the Company’s subsidiary and, as a result, this contract is now binding upon the subsidiary as disclosed in item 1.01 above, which item 1.01 is incorporated herein by reference. The Company’s subsidiary or subsidiaries intend to continue to enter into similar contracts in the ordinary course.


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