CirTran Corporation (CIRX)

[MFlores]

That is not what is happening.

The outstanding shares issued as of Sept 30, 2014 (the last official filing) was 4,498,891,910. Once the r/s is complete / recorded, the outstanding issued shares will be 4,498,892.

With the r/s approved, item (2) of the special meeting changes the number of shares that Cirtran can issue in total to 100,000,000 shares.

This means that now that the r/s has been approved, Mr. Iehab can issue an additional 95,501,108 “post r/s equivalent shares”.

100,000,000 less 4,498,892 = 95,501,108 available shares to issue.

This is how Mr. Iehab is going to pay YAG – with new authorized shares. YAG will then try to convert these shares. The proxy statement indicated that the potential number of shares converted by YAG could be between 4.5 million and 16.0 million (post r/s shares). That would at a minimum double the number of issued shares. However, it looks like there is a 9.9% limitation - YAG can only own 9% of the outstanding shares at any given time. There will be a YAG push to issue shares for other needs.

Once YAG is paid in full, Mr. Iehab's salary restriction by YAG ends.