Bots Inc (BTZI)

[lesgetrich]

The float is getting diluted. What is the float, now? And it's not just 12m shares. Add in the other sharesi ssued for the crapware.

I think you'd be better served not to laugh at legitimate concerns brought up on this board.

I wouldn't laugh if they were legitimate concerns. Fortunately they're not! Once more, you're misleading shareholders. Do some DD.

Float is the number of shares that can be freely traded at any point in time. The $3 million (roughly 12 million shares) will not have any impact at all on the float for at least one year because they must be held by the buyers for at least that long. Consequently, they can not be freely traded and are not part of the float.

From the PR announcing the offering...

mCig, Inc. Raising up to $3 Million in Financing for Expansion of Operations

LAS VEGAS, NV--(Marketwired - Sep 13, 2017) - mCig Inc., (OTCQB: MCIG), a diversified company servicing the legal cannabis, hemp, and CBD markets, is pleased to announce that it is concluding efforts to raise up to $3 million under a private placement to qualified accredited investors for the expansion of its operations.

The words "private placement to qualified accredited investors" are key to understanding the transaction. What is a private placement? From Investopedia...

Placement

A placement can also be called a private placement or unregistered offering. These securities offerings are exempt from being registered by the SEC because they are not offered to the general public. They are instead offered to a small group of investors, usually knowledgeable individual investors with deep pockets, and institutions such as investment funds and banks.

Regulation D

While private placements are not subject to the same laws and regulations of public offerings, they have to comply with Regulation D, a set of SEC rules that apply to securities sold in unregistered offerings.

Regulation A & D

Private placements occur when securities are sold directly to such institutional investors as banks, mutual funds and pension funds. They do not require SEC registration, provided the securities are bought for investment purposes rather than resale...

...Regulation A

Under an SEC rule called Regulation A, companies raising less than $5 million from capital markets in a 12-month period may be exempt from registering their securities.

Instead of filing a registration statement through the Commission's online EDGAR database, these companies need only file with the SEC a printed copy of an "offering circular" containing financial statements and other information to conform to "Reg A".

In other words, an 8-K prospectus doesn't need to be issued

Regulation D

Under another SEC rule known as Regulation D, which exempts companies that seek to raise less than $1 million from capital markets in a 12-month period, some smaller companies can offer and sell securities without registering the transaction.

"Reg D" also exempts companies seeking to raise up to $5 million, as long as the companies sell either to no more than 35 individuals or to any number of "accredited investors" who must meet high net worth or income standards....

...and once the placing company allows the shares to be registered...

SEC Rule 144

The SEC's Rule 144 allows public resale of restricted and control securities under the following conditions:

- the investor held them for at least one year;

- adequate, current information exists about the issuer of the securities, usually in the form of the standard periodic financial reports;

- the number of shares sold during any three-month period does not exceed the greater of 1% of the outstanding shares of the same class being sold or 1% of the average reported weekly trading volume;

- the sales are handled as routine trading transactions with normal commissions; and

- a notice is filed with the SEC.

As for the effect of a private placement on shareholders...

How does private placement affect share price?

With a publicly traded company, the percentage of equity ownership that existing shareholders have prior to the private placement is diluted by the secondary issuance of additional stock, since this increases the total number of shares outstanding. The extent of the dilution is proportionate to the size of the private placement offering. For example, if there were 1 million shares of a company's stock outstanding prior to a private placement offering of 100,000 shares, then the private placement would result in existing shareholders having 10% less of an equity interest in the company. However, if the company offered an additional 1 million shares through the private placement, that would reduce the ownership percentage of existing shareholders by 50%.

The dilution of shares commonly leads to a corresponding decline in share price, at least in the near term.

The $3 million placement at $.25/share would involve roughly 12 million shares or 3% of the outstanding stock (OS). Three percent of mCig's current share price ($.17/share) is about $.005/share. No different than an average day's trading range.

Moreover...

The long-term effect on share price is much less certain and depends on how effectively the company employs the additional capital raised from the private placement. An important factor in determining the long-term share price is the company's reason for the private placement. If the company was on the verge of insolvency and did the private placement as a means of avoiding bankruptcy, it would not bode well for the company's shareholders.

However, if the motivation for the private placement was a circumstance in which the company saw an outstanding opportunity for rapid growth that simply required additional financing, then the eventual extra profits realized from the company's expansion may push its stock price substantially higher.

Again, from mCig's PR...

Mike Hawkins, recently named top CFO in 2017 by Finance Monthly, states, "The fact that accredited investors are willing to invest in our company at a premium price from the market fuels us more than ever to deliver positive results to our growth. This capital raise will enable the company to diversify its portfolio without any toxic debt."

In Summary:

1.) The float is not getting diluted at all for at least one year.
2.) The effect on the float and dilution is roughly 3%, which represents a half cent change in the pps, roughly a current day's trading range.
2.) After one year, only one percent of those 12 million shares can be sold in any quarter if they are sold at all.
3.) Individuals purchasing shares in a private placement must buy them as an investment not for resale.
4.) The money raised by mCig will be used to diversify it's portfolio (i.e. for acquisitions) which should increase the company's value long term.
5. No 8-K is required for this type of transaction

Add in the other sharesi ssued for the crapware.

That's just another 12 million shares subject to the same restrictions.


Another misleading claim debunked!