Gary, I love the nautical reference in your openin
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Posted On: 03/22/2019 12:22:39 PM
Gary, I love the nautical reference in your opening paragraph. As much as the company has tried over the last few years, all that they have done is hit one iceberg after another. The fact the ship has not yet sunk is both a miracle and a testament to the company's resolve.
I've commented on this in the past and I will repeat it again. A reverse split, if implemented, may very well guarantee the company's survival or, at the very least, prolong it. I can't say this will be the case for the existing shareholders. Some will argue that the company will not necessarily go through with the reverse split, and if they do it may not be to the degree that some are fearing. If this is your view than vote accordingly.
A few other points that you and others have raised and that I would like to address:
1. Management's capacity to get a snapshot of the voting to date: I suppose this may be possible, but generally there is a third party that tallies the votes. As we all know voting fraud is very real and prevalent in all types of elections. SEC laws give companies and their board of directors a lot more leeway than shareholder advocates would like. In this regard the SEC regulators continue to implement measures to protect shareholders. Here are a couple of links that partly address the voting process and issues.
https://qz.com/85929/here-is-how-four-compani...ers-votes/
http://100fstreet.com/index.php/2011/02/the-a...lculation/
2. The possibility of the company implementing a "1 for 2, 3, or even 10" reverse split. It is not going to happen with the current proposal! Let me remind you that when the company contemplated all this, the share price was $.093. So what exactly will a 1 for 3 split do, bring us back to where we were before all of this started? I think I mentioned it before that as long as the R/S "elephant" is in the room. The share price will continue to hover at it's current range. If the current proposal is approved then all bets are off.
3. A few times you've raised the point that the company still has lots of room to raise capital given that they have a total of 500 million authorized shares. Yes this is true. But the real room for raising capital is in the 20 million shares of authorized preferred stock. As you know 500 of these were used to raise the $5 million investment. You are right. How much more room does the company need? Obviously the company wants a lot more! Consider the following: As of the record date there were 156,897,345 common shares outstanding, and 465 Series A preferred stock issued and outstanding. If the company were to implement the maximum 1 for 500 reverse split, the number of common shares remaining would be reduced to 313,794 shares...meaning that with the # of authorized shares still remaining at 500 million the company would still have 99.937% room to issue more shares. And of course the kicker is that these would be at the 500 times higher price! Folk please get your heads out of the sand for the moment and think about the above.
4. Let's obliterate out of the water the myth, idea, or impression that somehow before the vote on April 4, there will be a more definitive proposal put forward to the shareholders. IT CANNOT HAPPEN AND IT WILL NOT HAPPEN...did I put enough emphasis there with my caps? The reason I say this is because they cannot change the proxy material midstream especially when we are two weeks away from the vote. This is not just my opinion, it is against the SEC rules. The company can of course issue a clarification before the vote, or they have the option of extending the deadline. By the way it was just yesterday that I received my proxy material in the mail. Hardly enough time if I opted to go the snail mail route!
5. I just read lodge's last post. I too would love to be proven wrong and believe me I want to be wrong but I am not about to forget everything I have learned over the years.
Good luck to all of us...we'll need it!!!
I've commented on this in the past and I will repeat it again. A reverse split, if implemented, may very well guarantee the company's survival or, at the very least, prolong it. I can't say this will be the case for the existing shareholders. Some will argue that the company will not necessarily go through with the reverse split, and if they do it may not be to the degree that some are fearing. If this is your view than vote accordingly.
A few other points that you and others have raised and that I would like to address:
1. Management's capacity to get a snapshot of the voting to date: I suppose this may be possible, but generally there is a third party that tallies the votes. As we all know voting fraud is very real and prevalent in all types of elections. SEC laws give companies and their board of directors a lot more leeway than shareholder advocates would like. In this regard the SEC regulators continue to implement measures to protect shareholders. Here are a couple of links that partly address the voting process and issues.
https://qz.com/85929/here-is-how-four-compani...ers-votes/
http://100fstreet.com/index.php/2011/02/the-a...lculation/
2. The possibility of the company implementing a "1 for 2, 3, or even 10" reverse split. It is not going to happen with the current proposal! Let me remind you that when the company contemplated all this, the share price was $.093. So what exactly will a 1 for 3 split do, bring us back to where we were before all of this started? I think I mentioned it before that as long as the R/S "elephant" is in the room. The share price will continue to hover at it's current range. If the current proposal is approved then all bets are off.
3. A few times you've raised the point that the company still has lots of room to raise capital given that they have a total of 500 million authorized shares. Yes this is true. But the real room for raising capital is in the 20 million shares of authorized preferred stock. As you know 500 of these were used to raise the $5 million investment. You are right. How much more room does the company need? Obviously the company wants a lot more! Consider the following: As of the record date there were 156,897,345 common shares outstanding, and 465 Series A preferred stock issued and outstanding. If the company were to implement the maximum 1 for 500 reverse split, the number of common shares remaining would be reduced to 313,794 shares...meaning that with the # of authorized shares still remaining at 500 million the company would still have 99.937% room to issue more shares. And of course the kicker is that these would be at the 500 times higher price! Folk please get your heads out of the sand for the moment and think about the above.
4. Let's obliterate out of the water the myth, idea, or impression that somehow before the vote on April 4, there will be a more definitive proposal put forward to the shareholders. IT CANNOT HAPPEN AND IT WILL NOT HAPPEN...did I put enough emphasis there with my caps? The reason I say this is because they cannot change the proxy material midstream especially when we are two weeks away from the vote. This is not just my opinion, it is against the SEC rules. The company can of course issue a clarification before the vote, or they have the option of extending the deadline. By the way it was just yesterday that I received my proxy material in the mail. Hardly enough time if I opted to go the snail mail route!
5. I just read lodge's last post. I too would love to be proven wrong and believe me I want to be wrong but I am not about to forget everything I have learned over the years.
Good luck to all of us...we'll need it!!!
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