Post by
investl on Aug 26, 2010 12:28pm
DUMB, dumb
"The Company believes that the number of the currently outstanding Common Shares may no longer reflect the value of the assets of the Company. The Company's future performance is largely tied to the Company's ability to raise equity financings,( without excessively diluting the interests of its current shareholders.) "
NOTE: reasoning contained in ( ).
What a silly statement for a company to try to convince the share holders to vote for a share consolidation. If a company currently has 210,000,000shares trading at $.20/sh wishes to raise $1,000,000 it isues another 5,000,000 shs. If it consolidates to30,000,000 shares the price /sh should then become $1.40/sh. it would need to issue only 714286 shares to raise the $1M. Conclusion: Share holder equity diluted the same amount either time!