Being a relative novice, in no way a seasoned penny stock player as many of you seem on this board I must be missing key variables in the last two PR’s? Looking at it from a business perspective, in my opinion this is very positive, at least initially. As stated in a previous post, it would be very difficult for the company to secure adequate financing to implement any sort of aggressive strategic expansion model confidently.
The way I read this is the warrant execution is tiered such that it protects the expansion momentum once committed. Any unexpected pitfalls encountered during the initial growth stages can potentially cripple any small company if insufficient funds are available to cover any unbudgeted cost if incurred. Trying to startup operations in areas like West Africa increases the risk substantially. The fact that initial short term financing secured is minimal for their potential scope of operation, and with a 90-180 day re-payment option (non-penalty clause assumed) is very positive. My interpretation is initial production results are as anticipated or better giving management confidence to generate enough immediate revenue to fund expansion. Providing everything stays on track, the additional warrant’s that are in place have been secured as a backup if necessary. With no additional debt load accrued, if they can generate and sustain adequate revenue from their initial production of three dredges this puts the company in an extremely strong position moving forward.
I understand any sort of dilution by a company is typically perceived negatively, but in reality even if all warrants were executed would that bring their O/S float to an exorbitant amount for a company at this stage of evolution? I see a lot of other penny plays out there with O/S substantially higher and a fraction of the possibilities Sunergy Inc. has. Aside from their initial 2009 10-K filing debacle, having the confidence to release latest updates knowing fully the risks of negative interpretation and potential effect it could have on share price gives me an additional degree of faith in the company.
If any of my assumptions hold validity, this should increase shareholder value not decrease it in a much shorter time frame, with sustainability. Granted this is not advantageous for anyone looking to turn over quick profits, but if the Planet’s are in alignment and “elcheepo’s” possum sales are up this could be some of the best PR to date for the overall picture of the company. I wouldn’t be at all surprised if news is released in the very near future that will catch many off guard.
I have big shoulders so if of my comments or assumptions are completely naïve or inaccurate I welcome any constructive criticism. In no way am I blindly following or in love with this stock, I won’t hesitate to dump if I feel something’s wrong. Sorry for the long winded post but I still feel very strong toward this company.
