iTalk Inc. (fka TALK)

[trader53]

TALK No assurance A/S will be issued.

http://ih.advfn.com/p.php?pid=nmona&article=64427201


PURPOSE AND EFFECT OF INCREASING THE NUMBER OF AUTHORIZED SHARES

The Board believes the Authorized Share Increase is necessary and advisable in order to maintain our financing and capital raising ability and to generally maintain our flexibility in today’s competitive and rapidly changing environment. The additional one billion (1,000,000,000) shares of Common Stock so authorized will be available for issuance by the Board for raising additional capital, stock options or other corporate purposes. Assurances cannot be provided that any such transactions will be consummated on favorable terms or at all, that they will enhance stockholder value or that they will not adversely affect the Company’s business or the trading price of the Common Stock.


The immediate purpose for increasing the authorized shares is to provide enough shares required for the conversion of outstanding convertible notes and for the Company to potentially enter into additional convertible notes or similar instruments. Specifically, in addition to the 200,382,316 shares of common stock which are currently outstanding, we have reserved 181,474,124 shares of our common stock for the potential conversion of an aggregate of $115,000.00 convertible debt which we currently have outstanding. As such, we currently only have 121,355,616 shares available for issuance.


We are contemplating entering into an additional convertible promissory in the principal amount of $38,000. This note, if entered into, would allow the holder to convert at a 45% discount to the market price of our common stock at the time of conversion. Based on the closing price of our common stock on November 12, 2014 of $0.0017, this would result in an effective conversion price of $0.000765 and result in us possibly issuing 49,673,203 of shares of our common stock. Additionally, the terms of the potential $38,000 convertible promissory note would require use to reserve 317,500,000 of shares of our common stock, which we currently are unable to do.


The additional shares of Common Stock may also be used for future issuances of stock options pursuant to employee benefit plans and to provide for issuances to satisfy conversions of future convertible debt or convertible preferred stock. The Company does not anticipate that it would seek authorization from the stockholders for issuance of such additional shares unless required by applicable law or regulations.

The increase in the authorized number of shares of Common Stock and any subsequent issuance of such shares could have the effect of delaying or preventing a change in control of the Company without further action by the stockholders. Shares of authorized and unissued Common Stock could (within the limits imposed by applicable law and stock exchange regulations) be issued in one or more transactions which would make a change in control of the Company more difficult, and therefore less likely. Any such issuance of the additional shares of Common Stock could have the effect of diluting the earnings per share and book value per share of outstanding shares of Common Stock, and such additional shares could be used to dilute the stock ownership or voting rights of a person seeking to obtain control of the Company. The Board is not aware of any attempt to take control of the Company and has not presented this proposal with the intention that the increase in the number of authorized shares of Common stock be used as a type of antitakeover device. Any additional Common Stock, when issued, would have the same rights and preferences as the shares of Common Stock presently outstanding.