This is truly a head scratcher!!! I had to step away for a few days just to get my head straight on this one..
For those that have just started reading this board I am quite pro PHOT for many reasons.
Having said that I believe PHOT has to do two things immediately.
1. Release some information on the GIFT project. Anything but it needs to be done ASAP in order to keep momentum going for the stock.
2. Cancel the vote on Feb 7. Assuming they can.
Here is why:
Back when they were originally negotiating the JV the pps was around 0.03. To simplify, basically they were going to get 2 Billion shares for approximately $40M and their business connections and knowledge. In return they always had the 2B in shares that would be valued at about $60M. ( Assuming my math is correct) This would be about a 30% interest on their financing which is actually not a bad deal for this sector. Win/Wiin for all.
HOWEVER, since that time the MJ sector has blown up larger than most ever thought it would be able to in years.
Now, those 2 Billion shares (at todays price of about 0.30) those 2 Billion shares are going to be worth approximately $600M. That makes the interest rate about 300% on the $40M. Who is going to approve authorizing 2 Billion shares at that rate??? Not to mention that is probably a very conservative figure considering we were at about 0.50 just a few days ago. That would have made that $40M financing worth about $1.2 Billion dollars!!!!!!!
Here is the conundrum. As the pps goes up prior to Feb 7, the less likely the vote will ever take place. Currently PHOT has the A/S at 1Billion and only 700M of those have been issued. If they issued the remaining 300M shares for todays price they would have approximately $90M in cash (more than twice the JV offering) for the company and a A/S of 1 Billion vs 3 Billion.
A GIFT announcement and an announcement that they will not authorize another 2 Billion shares would really make this stock skyrocket.
All good things for PHOT. I think there is probably more going on behind closed doors than anyone of us imagines. It is illogical to even think of approving increasing the A/S to 3Billion for $40 Million in financing.
Once they announce the GIFT participants the price should double, triple, or quadruple on anything of substance. IMO
This is the premise for a couple of posts to follow. Sorry, if it has already been discussed.
GLTA
