oilin,
An increase in the authorized shares does not necessarily mean that there will be an increase in the outstanding shares; however, it does open up the possibility for dilution, but only for the purpose of financing both current and future projects. The company stated that it would increase the authorized shares to 1,500,000,000 so that in the future it could release more shares when needed. But as stated in the recent filing:
"The proposed increase in the number of authorized shares of common stock will not change the number of shares of common stock outstanding or the rights of the holders of such stock. Other than for the possibility of issuing new shares of common stock upon the exercise of outstanding stock options or warrants, the Company does not have any immediate plans, arrangements, commitments or understandings with respect to the issuance of any of the additional shares of common stock that would be authorized by the proposed amendment to the Amended Certificate of Incorporation. "
This statement means that the current outstanding shares presently is the maximum of authorized shares. That is to say, the current outstanding shares now equal the authorized shares, a quantity that was previously increased to relieve the company of 6 mil. in debt. It is because the maximum of authorized shares has been reached that the company now seeks to increase this limit so that in the future it can have the option--the option, the possibility!--to release more shares. If and when it does so, then it is in case the fact that dilution will occur, but it must also be realized that dilution stands in an inverse relationship with the company's growth. The more the company grows and becomes profitable---the more assets it holds and the more revenues it generates---then the less the dilution will matter. Think of the example of Google, and how GOOG is presently priced between $400 to $500 with a float of 314 million shares. If Google were to introduce more common stock, it would of course necessarily follow that the quantity of shares in the float would increase and due to supply and demand constraints the price would logically decline only if everything else were held constant. But everything else is not held constant, since the stock does not become any less weaker as a long term investment just because there are more shares. Shares rightfully decline in value only when there are severe underlying problems with the ability of the company to grow and produce, such as with the financial firms presently struggling to maintain liquidity.
Though an increase in outstanding shares would decrease the stock's price, it would only do so by a large degree if the company is also not generating adequate revenue to offset the quantity of shares in the float. UVSE fell in price from $1 to $0.01 recently because during this period it suffered intense dilution coupled with the perception that the company is not developing. But as we have read in the recent PR releases, this developmental company is in fact producing and thus moving into a +800% increase in revenue for the thirds quarter of 2008. I maintain my confidence in this company only on the grounds because it continues to produce and to generate increasing revenue. It is quite unlike other developmental OTCBB companies, which only produce PR releases about "future prospects" and "innovative products under development" to hype their stocks. With UVSE, there is no hype, because we know from the filings that they own wells, that they have constructed pipelines, and that they are turning from a revenue stream of $0 to $300,000 per month.
P.S. from now on I will only write incredibly serious posts. I apologize for the incredibly ridiculous yet humorous posts I wrote before. I also apologize for writing long posts; unfortunately my style of writing includes long sentences and long paragraphs. I am not paid to pump stocks as an Investorshub member has accused me of doing. I own 337,452 shares of UVSE.
