Sunset Island Group Inc (SIGO)

[Alan Brochstein]

EXTREMELY FAULTY LOGIC HERE!

SIGO will smacked $10 as soon as 46M O/S reduction will take place.

The float of SIGO has been and remains 4mm shares roughly. NOTHING CHANGES when the two officers, both associated with a recent OTC pump and dump through their involvement with Von Baron Farms, convert their common shares to preferred shares. They can always convert back. Their 4.6mm shares are equal to 46mm common shares. When the paltry $50,000 dividend is paid, the two officers will be getting $46,000, as their security is entitled to common dividends.

The market cap of the company, based on fully-diluted shares outstanding of more than 50mm, will still be the same. If the company ever reports a profit, which is highly unlikely, then it would need to use the fully-diluted share-count of 50mm shares to describe EPS. It would be incorrect to describe the market cap of a company as based solely on the "shares currently outstanding" when the holders of the preferred are free to convert back to common at any time they choose. Faulty logic and deceptive to think that the value of the company would be different by this sleight of hand.

At $1.40, this is $70mm, which is a really bad joke for an amateur operation like this run by a long-time penny stock gamer, the CFO, and the guy who was out there running the Von Baron Farms scam, the CEO. The "value" of this company is a tiny fraction of the current market cap, in my view.

BOTTOM-LINE: Like the dividend, the move to convert common to convertible preferred is a ploy intended to trick people into buying stock the company desperately wants and needs to sell