As a result of the Malecon acquisition, LX Retail Group ended up with majority control of OMHE. Immediately after the acquisition there were 1,130,651,683 shares outstanding (OS). mCig returned 172 millions shares for the purchase of VitaCig. mCig then converted it's $90,000 note in exchange for another 17 million shares of OMHE stock. The result is the OS we see today...
1,130,000,000 OS - 172,000,000 shares returned by mCig + 17,000,000 shares issued to mCig -------------------------------------- 975,000,000 current OS - 575,000,000 Restricted shares owned by LX Retail - 75,000,000 Restricted shares owned by mCig ----------------------------------------------- 325,000,000 free trading shares (float)
On April 3, the company announced a restructuring of it's shares...
ITEM 1.01 Entry Into a Material Definitive Agreement On March 27, 2017, Omni Health, Inc. (the “Company”) offered to it majority shareholder, LX Retail Group, Inc. to exchange all but 8,109,551 shares of the 565,000,000 currently held by LX Retail Group, Inc. for 5,600,000 shares of the Series A Preferred as described in Item 5.3 below. As a result, the current issued and outstanding number of shares of common capital stock of the Company is 418,938,292.
ITEM 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
On March 1, 2017, the Board of Directors resolved to recommend to the shareholders an amendment Article 4 of the Articles of Incorporation of the Company to include an authorization of 5,650,000 shares of Series A Preferred, 1,500,000 shares of Series B Preferred and 200,000,000 shares of “blank check preferred” shares. All preferred shares have a par value of $0.0001. On March 1, 2017, shareholders representing 64.77% of all voting rights consented in writing pursuant to Nevada Revised Statutes (N.R.S) § 78.320 to the amendment to Article 4 of the Articles of Incorporation of the Company. On March 27, 2017, the Company received confirmation from the state of Nevada that the Articles of Amendment had been filed on March 23, 2017.
Per the terms of the Articles of Amendment, each share of the Series A Preferred has voting rights equal to 1,000 votes per share and convert into common at a ratio of 100 shares of common for each share of Series A Preferred. Additional rights and obligations are detailed in the Articles of Amendment attached hereto as Exhibit 3.1.
Per the terms of the Articles of Amendment, each share of the Series B Preferred has voting rights equal to 100 votes per share and convert into common at a ratio of 100 shares of common for each share of Series A (should say B) Preferred. Additional rights and obligations are detailed in the Articles of Amendment attached hereto as Exhibit 3.1.
Per the terms of the Articles of Amendment, 200,000,000 shares of preferred stock were deemed “blank check preferred”, the designations of which shall be at the discretion of the Board of Directors without additional action from the Shareholders. Additional rights and obligations are detailed in the Articles of Amendment attached hereto as Exhibit 3.1.
This reduces the common shares to 418,938,292 and virtually guarantees that LX retail will continue to exercise voting control...
418,938,292 common shares = 418,938,292 votes 5,600,000 Series A Preferred Shares = 5,600,000,000 votes
Also on April 3, 2017, Omni issued a PR which stated...
In addition, 50,000,000 shares of common stock are to be converted into 5,000,000 shares of Series B Preferred Stock by several large shareholders. The actions reduce the outstanding common stock of OMHE by 62% to 368,938,292 shares of common stock.
The series B Preferreds can't be converted for 24 months after issue. There is a discrepancy here as the 8-K only authorized 1,500,000 Series B Preferreds. I think this is just a typo as the conversion ratio would suggest that the true conversion would be for 500,000 Series B Preferreds not 5,000,000. Hopefully this will be clarified on the 10-K.
500,000 Series B Preferreds = 50,000,000 votes
418,938,292 common shares - 50,000,000 common shares converted to restricted Preferred B --------------------------------------------------------------- 368,000,000 common shares OS after restructuring
To do an acquisition, Omni would merely issue additional Series B shares or Blank Check Series C Preferreds (Conversion ratio and terms to be defined later by the board). In either case, there would be no immediate dilution as preferred shares are not counted in the OS when determining Earnings Per Share (EPS).
There is absolutely no need for the company to do a Reverse Split (RS)!
AI
