Trudy Corporation (fka TRDY)

[nodummy]

TRDY - very selfish insiders

The share count numbers in my post from February were taken right out of the 10Q filed on February 22, 1011 for the period ending December 31, 2010:

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7743954

The 10Q clearly says on the very bottom of the first page that there were 1,650,862,912 shares outstanding on February 22, 2011.

So the question is how did the share count go from 1,650,862,912 shares on February 22, 2011 to the 649,400,831 outstanding common shares recently reported in the PRE14C for the 1:1500 reverse split:

http://www.sec.gov/Archives/edgar/data/815098/000107878211002767/informationstatement_pre14c.htm

Without looking first I would assume that some time between February 22, 2011 and September 19, 2011 the insiders/officers of the company swapped their common share ownership in exchange for preferred share ownership to avoid having their ownership in the company wiped out by the reverse split while at the same time increasing the value of their ownership by 1,500 times - a very dirty and selfish thing for them to do.

The very limited filings show that my theory about the common share to preferred share swap done by insiders/officers is absolutely correct. At the time of the 10Q filing on February 22, 2011 there were 0 preferred shares outstanding. At the time of the PRE14C filing on September 19, 2011 that had changed significantly.

The PRE14C filed on September 19, 2011 tells us all we need to know:

http://www.sec.gov/Archives/edgar/data/815098/000107878211002767/informationstatement_pre14c.htm

At the time of the PRE14C filing on September 19, 2011 there were 200 Series A preferred shares outstanding and 3,359,788 Series E preferred shares.

The Series A preferred shares convert into common shares based on the price of the common stock. On September 19, 2011 the 200 Series A share outstanding could convert into 16,036,755,324 common shares.

The Series E preferred shares convert into 1000 common shares each for a total of 3,359,788,000 common shares.



The PRE14C also tells us who owns those preferred shares.

Susan Glover who is related to the CEO, Christopher Glover owns 750,000 Series E Preferred shares which can convert into 750,000,000 common shares.

Kars Capital Inc. which is an entity connected to the President/Secretary/Director - Stanley Larson - owns 1,420,000 Series E Preferred Shares which can convert into 1,420,000,000 common shares.

We are not told who owns the other 1,189,788 Series E Preferred shares (which TRDY is legally required to disclose). Those 1,189,788 can convert into 1,189,788,000 common shares so that disclosure is extremely important. Must be a reason TRDY chooses to hide who owns those shares.

Daniel McCormick the Treasurer/Director owns all the 200,000 Series A Preferred shares.



You'll notice that the 1:1500 reverse split only effects the common shares and not the preferred shares. So the insiders ownership will not be affected at all by the reverse split - only the common shareholders. After the reverse split the insiders will still own the exact same number of preferred shares with the Series E preferred shares having the exact same conversion rights.

So not only did the insiders significantly increase their ownership by giving themselves far more preferred shares than what they originally owned in commons. The value of their ownership will be increased by 1,500 times after the reverse split is executed because those Series E Preferred shares will still convert into the same number of common shares, but the common shares will be worth a lot more after a huge portion of the common shareholders are wiped out by the 1:500 reverse split. And notice how those Series E preferred shares are not held directly by the officers of the company. They put their shares in the name of relatives and associated business entities. Like I said very dirty and very selfish.


The Wyoming business entity gives us a little bit more information about what has happened since my February post.

https://wyobiz.wy.gov/Business/FilingDetails.aspx?FilingNum=2010-000594154

On April 21, 2011 the authorized common share count was reduced from 29,800,000,000 to 2,800,000 and 200,000,000 Preferred shares were authorized.

The Series E and Series F shares weren't designated until July 8, 2011 meaning much of the share swapping from commons to preferred shares by the insiders was done recently not too long before the announcement of the plans to do a 1:1500 reverse split.

The authorized share count for TRDY will remain unchanged after the split. The A/S will be 2,800,000 giving future TRDY shareholders no confidence that the dilution won't start all over again after the 1:1500 reverse split is executed.

I also found it interesting that the Delaware SOS told me that the last filing on record for Trudy Corporation was from 2005. The first filing done with the Wyoming SOS was done on December 21, 2010. Why no filings from 2005 - 2010? Is this entity even legally owned? The authorized share count while it was domiciled in Delaware was 850,000,000 and there were no preferred shares authorized. Maybe the "move" to Wyoming was done because the new owners of the shell could not legally change the authorized share counts or designate any preferred shares with the Delaware SOS.