ZACKSTER - as far as the R/s - i think it is very probable but certainly not inevitable. it depends on 3 factors:
1. long term investor confidence in 3Q14 numbers and forward guidance
2. short term, attractive (non dilutive) capital/bridge capital for production
3. on a more speculative note - PLN suit being settled favorably
a majority of this will depend on how much confidence these 3Q14 numbers and guidance going forward instill in current long term investors and attract new ones. at 500MM shares - they would not need to. the current OS and inside share structure could support the growth and allow for plenty of redistribution of shares as the company grows.
however, if long term investors arent convinced and willing to assign a premium today for results tomorrow - the share price will continue to suffer, the convertible debt will continue to take a significantly larger part of the available AS reserve, and the company may elect to increase AS to go after more convertible debt for short term financing.
those two things - long term investors' confidence and short term attractive financing will primarily determine whether they increase AS and then in the future conduct a R/s.
on a speculative note - Veal alluded they may buy back shares if the PLN suit is positive. i posted last week (might have been on yahoo where i primarily post) how that could affect OS. lets assume for the sake of hypotheticals they were awarded $5MM in damages and the cash was paid over 12 months by the insurance company. if they took only 20% of that to give back to shareholders as a nod for those who took the early risk - they could buy back 333MM shares at today's price which is above the OS. so - just taking $250K or 5% of a $5MM settlement would buyback 83MM which is just under the increased float in 2014. so - they could look at what was the total increase in OS and buyback a portion/all ofthat and still be way ahead on a capital standpoint.
so - somewhere amongst these occurrences is your answer. if i had very strong confidence there would NOT be a R/s - i would be buying more aggressively than i am now. however, if the AS is not managed with respect to long term shareholders/investors - they will move away from the stock and then there is a good chance the price will tank after the R/s like often occurs in situations such as this.
AI
