Based on my understanding and all in my opinion, DYOR:
What would stop management to push the dates past 2019? 2020? Forever? Absolutely nothing, especially since some shareholders said that they are prepared to wait for a long time. They got away with it once so in my view there is no reason why they wouldn't do it again. I think pushing the dates for revenue wouldn't even be the only thing that they technically could defer indefinitely. For one thing the last 15 million they got was meant to be for 20 pearls, design, build and launch. I think it is safe to say that they failed on meeting that claim so in hindsight then what would stop them from failing again, whether by intention or otherwise, in the future? Nothing.
As far as dilution is concern, I think it is all but guaranteed that upcoming CRs (plural) are going to be done at significant discounts. If past history is anything to learn from then I think we are looking at around 25 percent discount from current price of 6.0 cents. I think it pays to remember that there were people back when who didn't believe that SAS was going to do the last CR that they did. Now some shareholders are saying that the upcoming CR are not going to be dilutive? Based on history I don't think such expectation is anywhere near accurate neither by the standard of basic principles of finance nor logic.
I think the current big question is who is going to be prepared to come up with the cash this time? The last sophisticated investor, underwriters and shareholders who participated in the last CR and SPP were still underwater by quite a heavy margin....with a new CR then they would be even more underwater. So what would be the expectation of new investors in participating in the upcoming CR? Especially taking into account that presumably more dilutive CR would be expected in the future? By that then I believe the success of the CR itself is not guaranteed as that would depend on how many would dare to participate. This is quite a stretch but if somehow there is anyone who want to have a controlling stake in SAS then why not wait until SAS is close to bankruptcy? Logically then they could pick up SAS shares at perhaps 1 cents per share? That is assuming that anyone would want to take over SAS.
SAS Price at posting:
6.0¢ Sentiment: Sell Disclosure: Not Held
