A Very Thoughtful Analysis
Ed:
I do appreciate your insights.
I could also cite numerous companies where reverse splits have been disastrous.
For example Archon Pure Foods, in doing a reverse split for a defensive measure, saw their stock after the reverse split plummet to $6 share and for $4,000,000 an investor grabbed control of a company doing $50,000,000 in sales, $5,000,000 in EDITDA and cash per share of $4.
Tech Team Global a provider of consulting services had $7 in cash per share, was cash flow neutral, had self liquidating debt collateralized by equipment leases and the related equipment and the stock slid to 2 7/8 and for $15MM you gained control of a $40MM bank book.
This is all a game of mental masturbation.
1) Until the Q comes out, you don't know how many shares are outstanding and how many potential shares can possibly be out there with respect to any convertible debt still outstanding.
2)No one, other than Mr. Samblis' hairdresser has ever seen the terms of the convertible preferred stock and if the conversion preference is changed based on recapitalizations or splits. Right now there are 2,400,000,000 potential common shares that could show up tomorrow on a conversion. It would be nice and in the interest of full disclosure to see the terms and conditions with respect to the conversion features of this security, which gave Senor Steve over 80% of the vote and was so significant that the prior auditors screwed up when they forgot about putting the stock, which was purportedly issued, on the balance sheet.
3)The purported employment contract from 2005,which again has not been seen, had a clause re: the great one maintaining control of the Company and the issuance of 350,000,000 shares to Mr. Steve, again we do not know the terms and conditions with respect to the issuance of such shares. Accordingly, I would recommend or consider an audit of the records of the transfer agent to determine if the amount of stock issued to Senor Steve was in accordance with the purported contract.
4) Yet, all of this is meaningless. If this company does not generate revenues, show a meaningful profit, figure out a way to use its most valuable asset (the tax loss carry-forward) and get some management that investors including major investors will believe in, this company will always be perpetually pink, unless the OTC Market Place gets fed up and puts them on the gray market.
This is all my opinion based on other posters, public filings and articles which have appeared in leading financial newspapers. The games people play must come to an end. Meadow2009 has no opinion on whether to buy or sell this stock or any stock and always reminds people to do their own due diligence.
Cheerio
