Reflecting on things... I wonder if the company may have continued exchanging trading shares for cash.
We saw this in the LAST 10-K AT A FAIRLY RAMPANT RATE:
"On January 25, 2019, the Company extended its consulting agreement with Redstone Communications, LLC for an additional six-month term, and as a result, we issued 105,000 restricted common shares to Redstone Communications LLC and 45,000 restricted common shares to Mr. Marlin Molinaro...." Blah, Blah, Blah. RESTRICTED Shares, so not a factor.
"On January 27, 2019, the Company issued 1,000 shares of common shares to an unrelated party for the consideration of $5,000 cash to the Company.
"On January 28, 2019, the Company issued a total of 400 shares of common shares to two unrelated parties for the total consideration of $2,000 cash to the Company.
"On January 30, 2019, the Company entered into an Investor Relations Agreement with American Capital Ventures, Inc. (“American Capital”) whereby American Capital will provide, among other services, assistance to the Company in planning, reviewing and creating corporate communications, press releases, and presentations and consulting and liaison services to the Company relating to the conception and implementation of its corporate and business development plan. The term of the agreement is six months and American Capital was immediately issued 9,000 shares of common shares as compensation under the agreement. The common shares were valued at $10.80 on January 30, 2019 and resulted in an expense of $97,200 which was recorded in full on January 30, 2019.
"On January 31, 2019, the Company issued a total of 3,917 shares of common shares, priced at $6 per share, to an unrelated party for the settlement of trade payables in the total amount of $23,502. If at the time of potential sale of the shares, the listed price per share is below $6, the Company is required to purchase the shares back at $6 per share which results in a contingent liability of $23,502. The common shares were valued at $11.00 on January 31, 2019 and resulted in a loss on settlement of $19,585.
"On February 1, 2019, the Company issued a total of 1,000 shares of common shares to two unrelated parties for the total consideration of $5,000 cash to the Company.
....
"On February 4 through February 8, 2019, the Company issued a total of 17,800 shares of common shares to sixteen unrelated parties for the total consideration of $89,000 cash to the Company.
On February 10, 2019, $3,000 worth of trade payables were settled with 500 common shares of the company. The common shares were valued at $12.15 on February 10, 2019 and resulted in a loss on settlement of $3,075.
SIMILARLY FROM THE LAST 10Q... ADDITIONAL SHARES ISSUED:
"On May 7, 2019, the Company issued 50,000 shares of common stock as part of a settlement to an unrelated entity for the use of certain mining equipment. The stock price at the time of issuance was $3.65 resulting in a settlement expense of $182,500.
"On May 30, 2019, the Company issued 25,000 shares to an unrelated entity in conjunction with a short-term borrowing facility issued by the entity. The stock price at the time of issuance was $3.49 resulting in a stock interest expense of $87,250.
....
"On June 7, 2019, the Company issued 25,000 shares of common stock at $4 per share to an unrelated entity under an equity purchase agreement. The Company received $100,000 cash consideration for the investment. The stock price at the time of issuance was $2.10. If the Company, during the period in which the purchased shares are held by the original entity, issues or sells any shares of common stock for a price less than $4.00, the Company shall issue to the purchaser an additional number of shares of common stock, so as to provide the purchaser the benefit of the reduced price per share.
"On June 7, 2019, the Company issued 30,000 shares of common stock for consulting services to an unrelated party. The stock price at the time of issuance was $2.10 resulting in an expense totaling $63,000. The consulting agreement is for six months and the shares for services were deemed to have been earned upon execution of the consulting agreement on May 30, 2019. In addition to the shares issued, 75,000 warrants with three-year exercise period and $4.00 strike price were issued upon execution of the consulting agreement resulting in a expense of $139,500.
"On June 12, 2019, the Company restructured a series of warrants; C-1, C-2, C-3 and C-4, held by an unrelated party as part of the ARC business loan which resulted in an increase in the number of warrants issued from 1.6 million shares across four warrants to 3.0 million shares across four warrants; an increase in the term of the warrants from the date of the amendment from a weighted average of 297 days to 753 days, and a decrease in the weighted average exercise price from $7.665 per share to $4.325 per share. Fair value was determined using the Black-Scholes Option Pricing Model. The incremental value as a result of the modification is a one-time warrant expense totaling $2,545,360 as of June 30, 2019.
A LITTLE DISCONCERTING... INDICATES MUST HAVE AN GUARANTEED SHARE ISSUANNCE BUILT INTO THE LOAN-- POSSIBLY TOXIC? NOT SURE. :
"On June 13, 2019, the Company issued 28,000 shares of common stock under a consulting agreement to an unrelated party. The stock price at the time of issuance was $2.53 resulting in a stock-based compensation of $70,840. The term of the consulting agreement is 6 months with monthly payments equal...
IN CONCLUSION... WHAT I'M THINKING AT THE MOMENT.
My concern is that the company has continued issuing shares to help meet its cash-flow needs. With a stable and increasing stock price, not many complaints... but the volume and shares we've seen traded... I'm mystified.
Guess it proves the adage true... even if we don't... someone knows what the market is doing and why.
Does some of the debt the company has undertaken, have some value backed guarantees? If so, as stock price goes lower, their debt is guaranteed by additional shares and they in effect are entitled to own more of the company. If this is the case... I SUPPOSE IF THERE'S A BRIGHT SIDE... THEY'RE GOING THROUGH A LOT OF EXPENSE AND TROUBLE TO INCREASE THEIR OWNERSHIP. WHY WOULD THEY DO THAT UNLESS THEY THINK THE THERE'S MONEY TO BE MADE DOWN THE ROAD??
GRANTED... I'M JUST SPECULATING... BUT WHO THE HECK KNOWS.
I'm guessing things will become clearer in the week to come... after the current underwriting (financing) is priced.
