An EXCELLENT Post That EVERYONE Should READ! I THINK I WILL STICKY (-: !!!! PERSON MARK FOR YOU, For Seeing Things Without Tunnel Vision!!
RFMK Financials & Dilution CHEAT SHEET :
From Transfer Agent: 3/12/2012
Total authorized: 2,000,000,000
Total issued and outstanding: 752,208,022
Total restricted: 304,565,212
PPS March 2012 ~$0.005
Market cap ~$3.7M
From Transfer Agent: 1/14/2014
Total authorized: 5,000,000, 000
Total issued and outstanding: 2,789,513,042
Total restricted: 270,085,212
PPS Jan 2014 ~$0.0009
Market cap ~$2.5M
Total share dilution under current CEO ~2B
What did the company GET from that dilution?
780M shares exchanged for $643,000 extinguished debt : aka, balance sheet to neutral ($0 debt, $0 liabilities, $0 assets)
Therefore actually ~1.2B in dilution since March 2012.
The assumption is roughly 200M were converted preferred shares from insiders of the past (which are now out of the picture and no longer have anything to do with the company story going forward).
Therefore actually ~1B in dilution since March 2012.
What did the company GET from that dilution?
Company balance sheet now showing assets of about $1.2M (receivables) plus ~$350,000 in inventory and other assets.
Corporate actions such as audit, legal team resolving past legal issues, new product development, etc.
Note $50,000 per month from IronRidge, so far assumption is company obtained about $300,000, for 1B shares implies a near term (six month) average cost basis for this subset of inflows only of about
$0.0003
Note, since early Nov (two months ago) an additional ~400M shares into the O/S, implies $100,000 inflows from IronRidge for 400M shares which implies a cost basis at about
$0.00025
Note, absolute low of RFMK stock : $0.0002
Note, 50 day moving average of RFMK stock : $0.0004
It is important to not only look at the change in the share structure over time and not see what the company received in exchange for that overall dilution. One must not judge dilution in a vacuum. This company appears to have gone through a fundamental shift from a low quality PK micro cap to a development stage company with much potential and a decent balance sheet with many opportunities for growth going forward.
After all of this time and corporate changes, from a balance sheet deep in the red with liabilities and no assets to a balance sheet on the positive side showing no debt and assets, along with ongoing funding from a large long term investment firm, along with potentially big game changing corporate developments, the market cap is now
LOWER
than it was in March 2012 when this company had NOTHING but debt and an ex-management team using the company as their personal ATM machine ($3.7M market cap vs. $2.5M market cap as of today). IF the current market cap was ABOVE the past market cap AND nothing had happened for the company (no fundamental changes, no funding, no inventory, no corporate changes whatsoever since 2012) THEN possibly there would maybe be an argument to be made that investors should be cautious of how the dilution has devalued the company. However, IMO the fundamentals of the company are much stronger than in the past and the PPS has moved downward in relation to the growing O/S, and even so the market cap remains lower than in the past, therefore on an overall perspective (regardless of individual market performance for each trader/investor) the company seems to have the most interesting valuation it has ever had.
Hmmmmm? Hmmmm....
Indeed, this is not rocket science...
May the force be with all RFMK investors, shareholders and followers.
GLTA
$RFMK
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