$ PSID. Here is the reason PSID give for raising the A/S.
Reason for Increase in Authorized Shares
The general purpose and effect of the amendment to the Company’s Certificate in authorizing twenty billion (20,000,000,000) 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.
On December 20, 2016, our Majority Stockholders and our Board approved a resolution to file the Increase in Authorized Shares to increase the authorized number of shares of our capital stock from 3,900,000,000 shares to 20,000,000,000 shares, such that the capital stock of the company will consist of 19,995,000,000 shares of Common Stock and 5,000,000 shares of preferred stock. The rationale for the increase in authorized shares is primarily related to the need to provide contractual reserves supporting a reserve requirement on convertible notes, which typically ranges between 300-400%, calculated on the amount of debt on an as-converted basis. The Company increased its authorized capital stock from 475,000,000 to 3,900,000,000 over the course of 15 months (December 8, 2014 to February 25, 2016). The Company issued approximately eight million dollars ($8,000,000) in convertible notes in 2015 and 2016. Currently outstanding convertible debt is convertible into approximately 7,000,000,000 shares of Common Stock as of December 21, 2016. Therefore, the reserve requirement is approximately 21,000,000,000 shares of Common Stock. Furthermore, if the Company’s stock price declines, the amount of shares required to be held in reserve increases and, in many cases, the Company is obligated to adjust the share reserves accordingly.
MY POST IS JUST MY OPINION!!!!
