TM editors’ note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.
After struggling for years in the memory sector, Dataram (DRAM) made a bold acquisition into the mining sector for diversification. The move has mostly gone unnoticed by the market.
The stock sits around $1.20 and near the lows as some of the initial excitement surrounding the purchase of the mining assets of U.S. Gold Corp. wear off. Is the market overlooking a key recent hire that highlights a hidden opportunity?
Past Struggles
Dataram sells customized memory solutions, but the company has struggled to generate a profit. The sector is just too competitive for a small player to break through.
For FY16 that ended last April 30, Dataram lost $1.2 million on sales of $25.2 million. The losses in the following quarters haven’t improved and the company has minimal assets.
Enter the decision to buy U.S. Gold Corp. The move was precarious considering the drastic shift in business fields. What does a technology company know about mining?
Enter the key to the story: David Mathewson. The former exploration head of Newmont Mining (NEM) recently built up Gold Standard Ventures Corp. (GSV) and now plans to do the same for U.S. Gold Corp.
While the company doesn’t appear to have an advantage in memory solutions, the scenario could be different in gold mining with proven leadership.
Shareholder Vote
Back on March 30, shareholders made the following votes on the outstanding company requests surrounding the merger with U.S. Gold Corp. and Copper King LLC:
- Approved the issuance of 45,880,820 shares, options to purchase 925,833 shares of common stock at an exercise price of $0.90 per share, and warrants to purchase up to 1,809,436 shares of common stock at an exercise price of $0.66 per share.
- Approved a certificate of amendment to the company’s articles of incorporation to increase the authorized number of common shares to 200,000,000 shares from 54,000,000 shares and preferred stock to 50,000,000 shares from 5,000,0000 shares.
- Approved granting the Board of Directors the authority to implement a reverse merger of up to 1-for-10 prior to March 2018.
