Well to start, people keep asking why would anyone buy shares at $1.00 when the company trades lower? That's not the question.
If you, or anyone buys shares on the market they pay the going price, more or less, and that's not what this S-1 is talking about. Whenever you buy shares on the market it's basically one person or entity selling their shares to you. And those shares were issued long ago. So for each trade, the company doesn't make anything on your trade, they only made their money when the shares were first issued.
Some were issued years ago, some were issued last year, or this year, so that when you trade now its all from that pool of around $151 million shares.
So what the S-1 is doing is providing the information about the company's potential desire to issue more shares. Adding shares is how they make money from the capital markets. Obviously they want to be careful with that because if you sell too many shares too quickly people could not want to keep buying. Thus we shareholders have to figure out if we are getting a good deal for the dilution, and the company should try to keep us happy in that regard.
That brings us to the S-1. It mentions the option we were already aware of, but also informs that the company would like to issue up to 10 million additional shares to raise capital. From the filing, they don't have to sell any shares, and don't plan to sell any shares unless they can get $1.00. They can issue as little, or none, or as much as they want up to 10 million shares, as they see fit. (and all numbers can be amended).
The main takeaway for investors, IMO, is that the more they may issue, the higher percentage of the funds raised are planned to go to acquisitions, up to 85% for the full 10 million, if used. The $1.00 pricing should indicate that the company expects to see the market price at or over $1.00 over the next several months, at which time they could elect to issue some or all those shares. Maybe we get some dilution, but that's not bad if it adds positive net income that more than compensates, and the last two acquisitions were immediately accretive.
Bottom line is they need a way to fuel growth and that's the main reason for them to be in the equity market. The better they perform, should lead to higher issue prices they can ask for in the future. But, like larger companies, if they become net income positive they may eventually have less need to use the equity market to fuel growth, and that would be the time a company might consider things such as dividends or stock buybacks, if any is left over from the future growth plans.
Last note, is IMO, if they get $1.00 for issued shares then that is a reasonable fair value at or around this stage of the company, given what we know. They are so close to profitability that even small issuances can keep working capital in check. That should imply little to no need for any unfavorable financing notes or terms, which implies strength. And if the stock price trades above that later they can always raise the issue price in an amended S-1, until maybe they growth large enough to fund growth in other ways.
So when do we see $1.00? IDK, but I believe the company is worth at least that much based on commonly accepted valuation methods. It's easy to say we are a ways from it, but we know how quickly prices can move. I like to think we are one solid announcement away from iQSTEL catching up to a fairer market value.
IoT contract? Compelling EV orders and data? Fiber acquisition with exciting net income projections?
Hard to say but guidance is to expect revenue from several new streams to begin this year, so the picture should begin to get much clearer over the next several months. That guidance in itself is something substantial as opposed to "coming soon". This is a specified time-line that we can measure as a potential performance point (or lack there-of), but I think they intend to deliver on that.
AI
