Please read some of my research and then give me your thoughts. This should be screaming!!!
MSGI research from SEC filings
1. 100,000,000 shares authorized and can't be increased until company has board-meeting to do so and then file with SEC for approval
2. Approximately 51,500,000 shares were outstanding and issued prior to debt conversion
3. Therefore total debt conversion into shares can't have totaled no more than 48,500,000 shares issued for converting 14.6 million in debt
4. In the SEC filings there are references to pre negotiated discounts on the debts were completed months ago therefore that explains the
maximum possible dilution of 48.5 million shares for the conversion of the total debt thus leaving the company with approximately 100,000,000 currently outstanding.
5. MSGI parent company owns 51% of new subsidiary (MSGI Energy) and Franklin owns 49% this allows for accounting purposes for all revenues and earnings to consolidate
back to the parent company (MSGI) for accounting and tax purposes .This will be the first of many new subsidiaries created to leverage the numerous technologies and opportunities MSGI controls. Now for one of the main benefits for this transaction
6. After extensive review of the SEC filings regarding the financial s especially the balance sheet it becomes very clear as to why Franklin( through Wall investments) became a
MINORITY shareholder in both the parent MSGI and MSGI Energy. It appears MSGI has approximately a $110,000,000 tax lose carry forwards that can be used to offset
future earnings .Under IRS rules to maintain the carry forward there can not be a change in control in the company or the suspended lose can no longer be utilized. This
is most likely the reason for Franklin's wanting to in effect do a quasi reverse merger of assets and expertise into MSGI as opposed to a fully blown independent public offering
7. Per the announcement that they want to move back to NASDAQ asap would require a minimum of a 4 dollar stock price, but for the major institutions and mutual funds
To make investments the price will have to be at least 5 dollars as they are usually restricted by charter from investing in any stocks less than 5 dollars. Also
at 5 dollars the stock will be margin-able and encourage much wider market participation and trading. So in conclusion the stock will either have to go to 5 dollars or if it gets to 2,5 dollars they could do at 2 for 1 reverse split to meet NASDAQ qualifications which also includes asset values and that's most likely why the Franklin transaction makes so sense as its a win - win for both companies
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