Someone texted me a link to your post and I forwarded it to Lee, he sent this in response.
Hi Chuck,
I received your text containing a link to the iHub post.
I think it may be important for you to go on iHub and point out the difference between "Issued" shares and "Authorized" shares.
In Paragraph 6.8 of the Plan it says the following:
Limitation on Issuance of New Common Stock and Other Securities.
Only 10,000,000 shares of New Common Stock shall be initially issued, and without affirmative vote of holders of 60% of the New Common Stock, no additional shares of New Common Stock shall be issued for a period of three (3) years from the Effective Date. .........
In the Paragraph 10 of the Confirmation Order it says the following:
Amendments to Articles of Incorporation and Other Actions. On the Effective Date, the Board of Directors of the Reorganized Debtors shall be authorized to amend the Articles of Incorporation and Bylaws to accomplish the following:
i. Authorize the issuance of one hundred million shares of New Common Stock and fifty million shares of Reorganized CK’s preferred stock. The Board of Directors shall determine in their discretion the rights, privileges and restrictions granted or imposed on such shares.
Under Paragraph 11 of the Order it effectively orders the Board to take certain actions:
11. Take Required Actions. Without shareholder approval, the Boards of Directors of Reorganized Debtors shall be authorized to take any and all action necessary or appropriate to effectuate any amendments to the Reorganized Debtors’ Certificate of Incorporation and/or Bylaws called for under the Plan and the Board of Directors and officers of the Reorganized Debtors shall be authorized to execute, verify, acknowledge, file and publish any and all instruments or documents that may be required to accomplish same.
Reorganized CK shall amend its charter in conformance with Nevada General Corporation Law and pursuant to section 1123(a)(5)(I) of the Bankruptcy Code. The amended charter or bylaws shall, among other provisions: (i) authorize the issuance of the New Common Stock; (ii) prohibit the issuance of nonvoting equity securities to the extent required by section 1123(a)(6) of the Bankruptcy Code; ............
I don't know that all of the Shareholders can be expected to understand the nuance in a 125 page legal document but I hope most of them will get it.
To imply (which is how I took the post) that I somehow manipulated the time to get past the Share Limitation is just plan wrong. I am in this with everyone else and what's good for shareholders in general is good for me. By reading the paragraphs above it is obvious that the Board could have (and probably should have) "Authorized" One Hundred Million shares over 3 years ago.
Just because shares are authorized does NOT mean they will be issued. However, the ability to issue shares can be very important to corporate financial flexibility and enhance the ability of management to get things done. It is important that all shares are issued with discretion, integrity and in concert with an overall strategic plan.
