American Green Inc. (OTCMKTS:ERBB) Ups Authorized Shares to 7.75 Billion

It seems American Green Inc (OTCMKTS:ERBB) COO and general media frontman, Stephen Shearin, is true to his word – there will be no reverse split of ERBB‘s common stock. Instead, on Tuesday the company increased its authorized shares by another 3 billion, bringing the AS figure to 7.75 billion shares.

The company was kind enough to inform of the increase through a Twitter post. According to that, the 3 billion increase is needed for “anticipated audit reserves for TrackX, future acquisitions and up-listing requirements”. It would be most interesting to see ERBB list the OTC BB tier rule that requires a company to have over 5 billion outstanding shares to uplist out of the pink sheets.

While future acquisitions is a perfectly valid reason, it would also be more comforting to see ERBB capitalize on its past acquisitions and manage to actually prove those can generate any revenues before freeing up space for new ones, resulting in more torrential dilution.

Then again, as of March 31, 2015 ERBB had millions of dollars worth of debt. All of this debt converts at a 50% discount from the lowest closing bid price 12 months prior to conversion. The main reason people were anxious about a reverse split in the first place was because the company very obviously needed more breathing space to satisfy this outstanding debt. True enough, there will be no RS, instead ERBB gave itself another 3 million shares worth of breathing space.

Currently outstanding debt can convert 50% below ERBB‘s 52-week lowest close of $0.0039.

Yesterday the company’s stock crashed nearly 11% and wiped almost all gains made over the previous session.