Sunset Island Group Inc (SIGO)

[Alan Brochstein]

THIS COMPANY IS ON A PATH TO BANKRUPTCY unless it sells shares at $0.10, as it is intending, or comes up with some other way to finance itself.

This is from their last 10-Q, filed two months ago: http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=12132666

As of April 30, 2017 and we had $2,876 in cash and $14,000 in security deposit. The Company also had $7,108 in liabilities that reflect accrued labor expenses. Our cash position is insufficient and as such we plan to raise additional debt and equity financing to meet our obligations as they become due.

This is actually incorrect, grammatically and factually. I will be reporting this company to the SEC for mistakes in its filings. Companies have a responsibility to accurately portray their financials, and these people, not surprisingly have failed. Here is the balance sheet that shows that the liabilities are actually substantially higher than what they claim.




The additional liabilities, a note due at the end of 2018, are going to balloon the shares or siphon off cash:

The Company has begun discussions to convert the note payable into an investment into the Company’s grow operations through a possible joint venture agreement.

They make another mistake as well, claiming their cash balance is $1906:

At April 30, 2017, we had cash and cash equivalents of $1,906. We currently expect that our cash on hand, and our cash flow from operations will not be sufficient to meet our anticipated cash requirements. As such, the Company will need to raise additional capital through equity or debt transactions.

Sloppy folks here! Be careful, as if they can't get these simple numbers right, that's not a good sign. $1906 was the increase in cash over the past six months, not the amount of cash.

The company used a bunch of cash in Q2 to fund operations as it lost over $100K. Cannabis doesn't grow for free.


Dividends? LOL! This company is flat out broke and needs to RAISE money not disperse it.

No, the company is going to sell shares at $0.10 per share: http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=12195440

We are offering for sale a maximum of 20,000,000 shares of our Common Stock in a self-underwritten offering directly to the public at a price of $.10 per share. There is no minimum amount of shares that we must sell in our direct offering, and therefore no minimum amount of proceeds will be raised. No arrangements have been made to place funds into escrow or any similar account. Upon receipt, offering proceeds will be deposited into our operating account and used to conduct our business and operations. We are offering the shares without any underwriting discounts or commissions. The purchase price is $.10 per share. If all of the 20,000,000 shares offered are not sold within 180 days from the date hereof, (which may be extended an additional 90 days in our sole discretion), the offering for the balance of the shares will terminate and no further shares will be sold.

This is from July 28th!

There is also a huge misunderstanding about how the valuation of a company works. If a company has 50mm shares but 46mm are turned into preferred shares that are convertible back to common shares, the value of the company doesn't change, just the float. But, these guys have already said that they were going to lock the shares up, so they weren't in the float in any event. NO CHANGE.


This company is worth nowhere near $82mm (50mm fully-diluted shares times $1.64), and there are about to be a lot more shares that are being sold at 94% below the current price, as per the company's most recent S-1, which went effective earlier this month.

Maybe management, instead of talking about the fictional dividends that can't yet be supported by operations, can address raising the capital that it says is necessary to do.

Finally, about that short squeeze:

http://www.otcmarkets.com/stock/SIGO/short-sales

3075 shares are shorted...