Please read pp 14-15 VERY CAREFULLY. This looks like a carefully worded scam. Using rounded numbers we currently have 400M shares outstanding with authority to issue up tp 600M total.
Let's assume a 1:10 reverse spliit, meaning the 400m issued shares become 40,000,000 and the stock price presumably becomes around 10c. Looks good, right. WRONG. They are not dividing the 600M by 10 to reduce the limit pro rata. They are leaving it at 600M. Which means they will have the ability to issue another 560M shares on top of the 40M we will then have. Thus as soon as these extra shares start to get issued, and I feel sure they will, our ownership in the company will be decimated.
Put another way, currently shareholders own 400/600 of the available shares, or 67%. If this goes through at 1:10 we will own 40/600 of the shares available for issue, a scant 6.7%.
Do the numbers. A million shares today is worth about $10,000. If this goes through at 1:10 and new shares are issued they could be worth as little as $1,000 unless there is some inexplicable increase in market value. This seems to be a ploy to make 500,000 new shares available for someone or some entity to buy the company and then take it private.
At least that's how I read it at 2am in California.
Someone, please, tell me I'm wrong, and how. Otherwise, vote No as we have little to lose anyway. Sadly, I doubt the SEC would spend any time on a $4M company with ever-decrasing cash assets.
