SUNSET IS GRP INC COM USD0.001 (POST REV SPLT (OTCMKTS:SIGO) is again one of the most exciting stocks trading on the OTC Markets universe. There are multiple reasons for this boom. The company announced 80% share reduction count, several cultivation deals, and is considering 230,000 square feet of cannabis grow space. We mentioned in a previous article named 'SUNSET IS GRP INC COM USD0.001 (POST REV SPLT (OTCMKTS:SIGO) On A Bull Run' that following the company's announcements is very beneficial."Sunset Island Group, Inc. is operating in the exciting medical marijuana industry, which is growing at a high pace after recent legalization measures. To sum up, the company is growing and has clients even before the harvest is ready. If the good news keep coming, we don’t really see why the share price would stop rising; rather it is expected to maintain the upward trend." SourceWe will explain in more detail what is happening with the stock, but before that, have a look at the share price increase and note the large amount of volume that changed hands in August. Some days more than 400 thousands shares were traded.
SIGO Daily
Business and Recent Developments
SIGO's main activity is the manufacturing and distribution of medical cannabis in the US. The company has leased green house space in Northern California, which has already been approved for cannabis cultivation and encompasses 12,000 square feet. Additionally, consulting and advising other clients operating in the marijuana sector are also among the significant activities of SIGO.
On July 25, 2017, the company released that it will be reducing the company's authorized share count by 80%. CFO Valerie Baugher explained in the following words:"We currently have 50,031,771 shares outstanding and 4,031,771 shares in the float. We are finishing up our first harvest and based on the results, we feel confident that over the long term, our outstanding share count should settle somewhere between where it is now and 70,000,000 shares. That being the case, we are immediately reducing our authorized share count to an even 100,000,000 shares. By second or third quarter of 2018, we fully expect existing profits to fund further expansion over and above the planned expansion outlined in our previous press release. At that time, we may look at a further reduction in the authorized number as a show of good faith that we are serious about our long term commitment to shareholders." SourceWhat was the reaction to this news? The share price jumped a little bit, because the market recognized the good intention of the company. However, we don't need to forget that the authorized share count is different from the total amount of shares outstanding. The company reduced the amount of new shares that can be issued. But, the total amount of outstanding shares did not change. Hence, shareholders did not earn a large stake in the company. On August 8, 2017, we could read that the company did what it had promised. Additionally, in the same news, the CEO, T.J. Magallanes, reminded that 66k square feet of grow space was planned at that point in time.On August 1, 2017, the company announced that it is in the process of signing cultivation agreements with other companies. The news is significant, since new deals would help the expansion of SIGO. The CEO, T.J. Magallanes, quoted the following:
"The additional cultivation agreements that we are currently securing are in anticipation of that being the case. We should know by August 15th at the latest, but preliminary indications are favorable." Source
On August 3, 2017, the company announced that it had looked at additional expansion space. The company is now considering 230,000 square feet of cannabis grow space. The news is very significant, as more cannabis grow space means higher revenues for the company. The most significant announcement was noted at the end of the press release. The CEO increased the market expectations on the company in the following way. As we said, we need to be alert on the next news from SIGO.
"We are working out the details on two more pieces of very exciting news and will share with our investors in the coming weeks. If both of these come to fruition, there's no doubt in our minds that investors will be extremely pleased with their investment in Sunset Island Group." Source
On August 7, 2017, the company put out that a monthly dividend was to be paid out on a consistent ongoing basis to shareholders of record. Additionally, in the same press release, the CEO said that "from August 1st through August 14th, the company is projected to generate $158,000.00 in sales". We believe that this sentence excited the market, which reacted by pushing up the share price from $0.4 to $0.9 in only a few days (some days later, profit taking pushed down the share price). CFO Valerie Baugher again noted that more news is ahead.
"In addition to that, we still have one or two more exciting pieces of news for you that we'll cover in the coming weeks." Source
Finally, in this filing, the company noted the following question:
"The Company has received questions regarding the Company’s operations. The Company felt it was better to answer the questions through an 8-K instead emailing the individuals directly.Q1. How much revenue has the company generated from the initial harvest?A1. From August 1, 2017 through August 7, 2017, the Company generated approximately $140,400 from 117 pounds harvested." Source
ConclusionThere is a lot to like in SIGO. The developments announced are promising, but the most significant is that the company's expectations are quite high. This fact seems to be pushing up the share price. $158,000.00 in sales are expected in August, new deals are said to be signed soon, and the company keeps saying that more announcements are about be released. To sum up, keep an eye on this company, as shares are now at the upper end of the range and a big news announcement could send shares flying higher.Be sure to check out our coverage on SIGO. We will be updating our subscribers as soon as we know more. For the latest updates on SIGO, sign up below!Image courtesy of West Coast Cannabis via FlickrDisclosure: We have no position in SIGO and have not been compensated for this article.
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