One of the easiest ways to get attention on a start-up company traded on the OTC is to get it promoted. Siga Resources Inc (OTC:SGAE) is being promoted by a group right now, but will this help?
SGAE’s stock has been rather illiquid. It wasn’t traded last Friday. On Thursday, only 2,500 shares were traded for a 3.08% drop and a $0.63 close.
As a matter of fact, since Jan. 1 SGAE has been traded in just 9 sessions. In cases like this, promotions are a natural choice.[BANNER]
The thing about promotions is they tend to work better when paid with cash. In this case, the compensation is in shares. To be more precise, 2 million restricted shares by SGAE, and 2.5 million free trading shares from an undisclosed third party.
That’s not necessarily a bad decision on the part of the company’s management. They just may not have the option to pay in cash. According to the financial report for the quarter ended Jan. 31, the company had:
- $19,704 in cash
- $30,112 in total current assets
- $107,655 in total current liabilities
- no revenues (pre-exploration stage company)
Back on May 19, SGAE announced a joint venture on the Lucky Thirteen Gold project. The other party in the JV has agreed to finance the development of the project, which will be operated by a third entity created for that sole purpose.
It may be too early to say how that project will go, what is clear at this stage is that SGAE will get some publicity, which however, may not lead to the desired results due to the share-based compensation.
