Adia Nutrition, Inc. (ADIA)

[Jason Coombs]

Since 2006 it was my choice NOT to issue shares until and unless they could be sold for a reasonable valuation to raise new capital. To do otherwise literally steals value from everyone who has already invested and gives that value to the buyer/recipient of the newly-issued shares.

I've encountered the idea before that every share authorized is going to be issued, and I do understand that way of thinking, but do you know what the company must do in order to increase the number of shares authorized? It varies from state to state (corporate law statutes in the state of incorporation control this process) and the company can enact its own rules by adopting bylaws which override most or all of the state law governing the corporation.

In the case of ADIA, the owner of the Preferred shares can almost unilaterally change the authorized share count using the special voting rights that exist in the Preferred.

So in effect, in nearly every company except for large exchange-listed companies, the number of shares authorized should be understood to be infinite. Against that backdrop of the company's ability to authorize and issue an infinite number of shares at any given moment, it has always seemed more relevant to me to see that days, weeks, months and years go by WITHOUT new shares being authorized or issued for no good reason.

Let's see at what price Bill Hodson is able to raise new capital. It is my hope and belief that the new capital, when raised, will not be harmfully-dilutive to shareholders. Even if Bill decides to increase the number of shares authorized, I trust that there will be a good reason for doing this that enables the company to move forward for the benefit of everyone who has already purchased shares. More shares being issued does not automatically mean anyone has any value stolen from them. It depends on the execution. From this we can infer the state of mind and ability of management to create value for shareholders.

Just look at how many shares of GOOG are authorized and outstanding:

http://www.nasdaq.com/symbol/goog/institutional-holdings
http://www.nasdaq.com/symbol/googl/institutional-holdings