Allow me to shed light on the R/S discussion
-A reverse split in and of itself is meaningless. If you owned .001% of the company before the reverse split, you own .001% after it. You have fewer shares and each share is worth more. So nothing positive or negative there.
- The reason R/S is a disaster for most OTC stocks is that the reason they're splitting is to issue more stock at a discount through toxic notes.
The reason TGLO would reverse split is (presumably) to do a secondary offering since they have no toxic notes. (N.B. if they need to issue toxic notes to raise money, run). They could also simply raise the A/S (which interestingly, is now shown as N/A on OTCMarkets.com- it used to be shown as 500 million). They could also convert their common stock into convertible preferred super-voting shares. Any of these measures would allow them to sell hundreds of millions of new shares.
The advantage of a reverse split is that they can then get a higher PPS for each new share. Despite what some might like to think, they're not putting their 100% owned assets into a company they own 71% of. So if they do a secondary offering to raise funds, the total assets will be the funds raised. So whatever the share price of the secondary is, it will determine the value of the existing shares. If they want to move to an exchange, they will want that value to be above $1 and ideally, a lot more.
This is why a reverse split is likely if moving to an exchange is the goal. If they just raise the A/S or convert to preferred, it's going to be very hard to get new investors to pay $1/share for a company that will have $1/share in assets and existing shareholders with $440+ million worth of stock. However, if they do a 1:100 reverse split (as an example), then sell shares at $5/share to raise $50 million, the current investors are only getting about $4 million worth of stock. That's an amount new investors could probably live with.
This is the problem with TGLO's current market cap of $70 million. Any additional money put into the company will have to be willing to accept that $70 million (or as some speculate, a lot more) even though the current shareholders are not providing any funds. It's not impossible, if new investors think the company has value far in excess of its cash, but they are in a business that requires lots of cash for a long time before any returns are provided, it's extremely unlikely.
"There's a sucker born every minute, 2 to take him and 4 to lend him toxic debt" PT Barnum's investment advisor.
