American Green Inc (ERBB)

[groveswise]

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Amerging News




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Q: Won´t the new post-reverse share price just go back to its old price before the reverse split? What prevents this from happening?

(6/24/2007)

A: Thanks for writing. OK... to start with, all reverse splits or rollbacks aren´t the same.

If a small public company goes out of business and needs to find new owners, it must reverse the stock in order to make room for those new owners. In almost every one of these cases, there is a span of inactivity that takes place as the company transitions from the old controlling shareholders to the new controlling shareholders. During this transition, the stock price falls back to almost nothing. Very importantly in this case, the authorized shares are seldom rolled back in tandem with the outstanding shares leaving a majority of shares still authorized but, as yet, unissued. A formula that spells trouble for the old shareholders.

A second type of reverse split scenario takes place when the company´s capital structure can´t support the business model. In Amergence´s case, the company´s revenue (as SunnComm) went from almost $200,000 a month to zero, primarily because of backlash created by several consumer group´s negative reaction to a competitor´s CD copy protection methodology. The Company needed time to re-tool and come up with additional products that would create revenue. During that hiatus, the company´s share value fell lower and lower because it couldn´t report additional revenues. Even though the company cut its overhead continually, it was forced to sell equity to survive during the interim.

Now that the Company is preparing for its re-emergence (pun intended), the stock structure will not allow us to attract the resources required to give the company a fighting chance to successfully complete its business plan. A rollback (of BOTH, the issued/outstanding shares AND the authorized shares) would have to be an integral part of the Company´s recovery.

There will be no lulls, more financial resources, more news, and an enhanced acceptability in the overall marketplace with our share price measured in dollars instead of the sub-pennies.

Yes, we expect to see some "hammering" of our share price following the rollback and it is our hope that we can show enough progress with Amergence to make up whatever we may lose in the short term, and to justify your continued support.

Thanks again for writing.

http://70.167.195.121/askamergence/

ABOUT THE AMERGENCE GROUP

The Amergence Group (AMNG.PK) identifies, nurtures, and expands selected emerging companies across a wide range of industries and disciplines. The primary goal of the new business development enterprise (BDE) is to coordinate services and activities that foster and promote a business environment capable of accelerating the growth of innovative companies. The Company attracts new and early growth businesses that wish to take advantage of resources not generally available to them, such as mission-critical capital, in addition to legal, accounting, and public relations resources. In exchange, the Company will retain a small minority ownership position in the promising new businesses. The Company is currently reviewing comprehensive due diligence packages from a number of potential target companies, ranging from the medical, legal, and entertainment industries.:

Company Contact: Investor contact:
Peter H. Jacobs Investor Relations
480-443-1600 480-443-1600
[e-mail] [e-mail]