Major dilution, Authorized shares being doubled - increased to 975,000,000. Ouch.
This Information Statement contains a brief summary of the material aspects of the actions approved by the Board and the Majority Stockholders.
AMENDMENT TO ARTICLES OF INCORPORATION, AS AMENDED, TO INCREASE THE AUTHORIZED SHARES OF COMMON STOCK FROM 475,000,000 SHARES TO 975,000,000 SHARES
The Company’s Articles of Incorporation authorized the issuance of 475,000,000 shares of capital stock, par value of $0.01 per share, and 5,000,000 shares of preferred stock, par value of $0.01 per share. On October 3, 2014, the Board of Directors of the Company approved the Certificate of Amendment of our Articles of Incorporation, which is attached hereto as Exhibit A , to increase the Company’s authorized capital stock from 475,000,000 shares to 975,000,000 shares, such that the capital stock of the Company will consist of 970,000,000 shares of common stock, par value $0.01 per share and 5,000,000 shares of preferred stock, par value $0.01 per share (the “Amendment”).
The Board will file the Amendment with the Secretary of State of Delaware. The increase in our authorized common stock will become effective on the date of filing.
Reason for Increase in Authorized Shares
The general purpose and effect of the amendment to the Company’s Articles of Incorporation in authorizing nine hundred seventy five million (975,000,000) shares of capital stock is to facilitate existing and future financing agreements, if any, which often include the requirement to provide irrevocable reserve of common shares in excess of shares currently issuable under the financing agreements, which enables the Company to continue its current business operations. Our Board of Directors believes that the increased number of authorized shares of common stock contemplated by the proposed amendment is desirable to provide us with the flexibility to meet our business needs as they arise, to take advantage of favorable opportunities and to respond to a changing environment, and is in the best interests of the Company and its stockholders,
