Aquagold International Inc (AQUI)

[Lochan]

It is quite common that a Company will pay for professional services with shares of the Company's stock, for example, legal fees or accounting fees. That may be one reason why the Company increased its authorized shares.

Let's take the hypothetical scenario of a buyout offer. You would probably take that as good news. But the Company will have huge professional fees to pay with little cash available, so they issue shares to pay those fees in lieu of cash.

It's like wearing a diamond earring. First you have to suffer a little pinprick when your ear is pierced, but then you can wear the diamond. Similarly, an increase in authorized shares may sound threatening, but it is a means to an end, the end being the growth of the Company or, under the above scenario, the sale of it.

But let's not make this a one-sided presentation. Take the scenario where the Company is being sued. To defend itself, they hire a team of attorneys who agree to work in exchange for shares of AQUI. Aquagold then has to increase the number of shares authorized so they can pay the attorneys to defend them in court. Aquagold wins the court case and its share price explodes. So you win again.

There are a million scenarios you could visualize, so why dwell on the negative side. Because there is no certainty at this point as to what is taking place, one is advised to not be over-invested in risky pinksheet stocks. You risk what you can afford to lose, but don't be upset if the Company whose stock you purchased does not release information when you want it to because of its sensitivity, because the timing is not right or for some other reason.