A SHORT-TERM CONCERN FOR ILNS. I read a lot more about ILNS over the weekend. I am more excited than ever about this stock. However, between now and the next 21/2 weeks or the end of this quarter which I believe ends on March 31st, I have a concern. ILNS fiscal year ends June 30th of each year. My concern is about a paragraph on page 13 in the most recent 10-Q dated February 22, 2011:
“In December 2009, our shareholders approved a resolution authorizing the Company to amend its certificate of incorporation to effect a reverse split of the Company's outstanding common stock, pursuant to which any whole number of outstanding shares between, and including, fifteen and fifty would be combined into one share of common stock and to authorize the Company's Board of Directors to select and file one such amendment. Management intends to effectuate this reverse split during our third fiscal quarter.”
If I understand this paragraph correctly, we are in the third fiscal quarter now for ILNS. That means if a reverse split is going to occur it will happen in the next 21/2 weeks. Naturally, a reverse split, if history is any guide, would adversely affect the current Common Stock holders. I don’t know if ILNS will or will not do a reverse split. Will they do what they said they intend to do? I checked the prior 10-Q’s and the Annual Financials (10/13/2010) and I could not find any discussion about a reverse split. Thus, this paragraph appears to be new. It is clear that ILNS is diluting the Common Stock. The 10-Q repeatedly states that Notes Holders and Preferred Stockholders are being paid-off with Common Stock. An orderly dilution of Common Stock to pay debt does not concern me. Small pharmaceuticals do it a lot. They have to. But a reverse split is a different matter. I have already taken the necessary steps to protect my gains in ILNS. As you know I am in at .0015. As soon as April 1, 2011 comes by I will reassess the situation. If no reverse split has occurred, it’s party time! If a reverse split has occurred, I will wait and watch what usually happens in a reverse split and buy after the decline is over. I have removed my TP of .20 from my Personal Profile. I believe ILNS is going to make me more money than any stock I have ever owned! We have the good fortune to be in on the ground floor with a company that offers new and exciting cures for Alzheimer’s disease. Good luck to all of you.