InvestorsHub Logo
Followers 555
Posts 2241
Boards Moderated 1
Alias Born 12/27/2000

Re: florida135 post# 3213

Monday, 09/25/2006 12:20:40 PM

Monday, September 25, 2006 12:20:40 PM

Post# of 32427
That is a question he can't answer and probably never will..Dilution will always be a major factor in a pinksheet stock.

Is is quite simple on why..Most companies have a couple of options to not have dilution and one is straight out a loan from a financial institution and that is very unlikely..Simply put..The company would have to open up it's books and have collateral,which usually involves personal assets and that is rare in pinksheet stocks and IMJX since many family members are involved makes this point..The other one is a venture capitalist and this usually involves the individual or individuals who is putting up the monies wants on the board and a major stake..This is also unlikely given the scenario of members of the same family in the company.

The option that many of us that are familiar with is Equity Type Financing packages..So far all indications is the company directly is issuing/selling from A/S..The Equity Financing instruments involves a loan from the likes of Cornell Capital who is a major Financer and a total dilution polluter..We all know about this venue...These type of financing gives the company millions of dollars and in turn issues shares which eventually hits the markets..This one is really a major problem and why pinksheet stocks fail and always turn eventually into a R/S and then just becomes a worthless issue like 98% of the companies traded in this arena.

My guess is if the company can't raise the revenue by this first wave of selling shares,they will have no doubt to bring in the likes of Cornell or other Equity Financing on the next addition of raising the A/S, which I do expect by the end of the year and then this issue will have lost it's luster and can be deemed as junk.

Welcome to the nature of pinksheet trading.

Have a good day
Varok