tradingfunds, with the AS increase...
The increase in the AS from 1 Billion to 1.5 Billion shares do not scare me. Bottom line, we all know that they are not going to allow 500 Million shares to hit the market because those shares are "very likely" not issued. If they do decide to issue the shares any time soon, still, they will have to be restricted for 1 year.
The increase in the AS by 500 Million shares was probably to be used as leverage/collateral to show that enough shares are in the company's Treasury to be issued if need be for the $5 Million financing deal previously announced. To do this, those shares do not have to be issued. They only have to be shown that they are accounted for within their Treasury for "just in case" reasoning. The company has ”Net Income” but I suspect that they have plans to contribute that income towards the expansion of the mill capacity at the Cinco Minas property and other things related to operational growth for their other properties.
The PR stated that up to $5,000,000 was committed in capital funding for the Company ”upon completion” of the up-listing process. "Upon completion of the up-listing process" means that nothing will transact until after SRGE uplists to be on the OTCBB. I think by now, we all should know what that means and what all that will entail. The PR stated that the bond and equity holders expect to earn a return on their investment in the form of interest, dividends and stock appreciation.
If a deal is truly going to be done, the company has to use something of value as leverage. Amongst the main things of value are the shares of which they could benefit by earning interest, dividends, and stock appreciation as from what was PR-ed. This means that for an entity to commit to such a deal to support SRGE, they must have confirmed that something huge is coming which will be very big for them and SRGE. As I had explained before, this is nothing more than setting the stage for bigger things moving forward.
Also, the 500 Million shares ”could” be for something in the making to be used to secure their possible Joint Venture (JV) deal. If the valuation in SRGE was confirmed by the JV entity, then no doubt they would want some shares to further enjoy the fruitages of its labor to support SRGE with a JV deal. Still, the JV entity could benefit by earning interest, dividends, and stock appreciation as from what was PR-ed. Maybe this is how the major NYSE company doing the JV deal will be granted the majority control over the company which could be part of a deal too.
I’m choosing to see the glass ”half full” with this increase versus seeing the glass ”half empty” here with SRGE. Let’s be real… if the company’s intentions were anything less than genuine, they would have increased the AS by far more than 500 Million shares. We’ve all been in stocks that had less than genuine intentions where those stocks had raised their AS to a few billion shares. There was nothing legally stopping SRGE for doing such if such were their intentions, but instead, SRGE did not do this. For SRGE to only increase their AS by 500 Million shares means to me that they were doing so for ”strategic reasons” to grow. Let’s see what is released from the company to justify this increase. I am still expecting something very positive and very huge.
v/r
Sterling
