Replies to post #14933 on Sunset Island Group Inc (SIGO)

[Alan Brochstein]

I think this is 100% right:

Why 8 million shares? Well you and I know why, they plan on issuing 8 million Series B. That $200 per pound will be paid out quarterly FOREVER, and I'm guessing it's owned by Wade or someone close to him.

Then there will be a Series C, then a Series D

WASH. RINSE. REPEAT.

[loanranger]

Ok, maybe they won't be fixing anything. But I've seen Certificates of Designation and I've never seen one that quantifies a dividend for a whole Series of Preferred and only issues part of it.
That said, there's a lot of things I haven't seen before.
(BTW, I'm having trouble keeping up with the level of posting and often put up a response that shows that.)

What do the numbers suggest, then?
"the company has announced that it has harvested 117 pounds of medical cannabis between August 1, 2017 and August 7, 2017. The initial harvest through the first week of August generated $140,400 in revenue."
"The Company generated approximately $194,000 in revenue for month of August."
If the rest of the month's harvest was priced like the first week there would have been a little over 160lbs harvested in the full month. Obviously this is the company's first month of production and isn't likely to be representative (and the dividend is presumably not retroactive). But that production rate would equal 480lbs a quarter and at $200/lb ("So the $200 would be split by the number of Series B shares that are outstanding"...per the email) the payout would be $96,000/qtr or $384,000/yr. For a $300,000 investment.

Am I doing something wrong?

The company's email response says "At 305,700 its $0.00065 per share" and that indeed does multiply to $200/qtr. But I don't think it changes my math:
$.00065/share x 305,700shares x 480 lbs/qtr = $95,378/qtr.

So I don't think that I am doing anything wrong.


But I think that there's a bigger question and that is:
If "the $200 would be split by the number of Series B shares that are outstanding", then there's no incentive at all for any further investment in the Series B shares. Any new investment would simply be splitting up the same $200/lb dividend. Any new investor would be taking dividend money from the original investors or any new investment from the original investors wouldn't increase their dividend.
That makes no sense to me at all.


They may not be fixing anything, but I'm not inclined to withdraw this:
"There's an obvious problem with this deal."

[integral]

That was not written by an attorney, nor anyone with any professional legal or financial background. It's, so, the, so, at. Don't forget "as a whole". No professional prepares corporate communications this way. This was drafted by an idiot.