Jayben, I think there will likely be a reverse split coming at some point for the common, unrestricted shares. This will probably happen after the series E preferred shares are converted into common shares in 6 to 12 months. As we all know by now, this will effectively double everyone's holdings as of 28 April. So if someone had 1 million shares on 28 April, for example, they will end up with a total of 2 million shares in 6 to 12 months.
I expect the reverse split to happen after the company gets the Ohio project off the ground and starts showing some of the cash flow in their quarterly reports. A guess at how it could go is that the current diluted share price could go to maybe $.0010 on news that the company struck oil in Ohio later this year. Then we get the conversion of the series E preferred to common. And then I think we could see a reverse split of say 1 new share for every 500 original shares. This may sound terrible, but keep in mind that the initial rise in the share price of the diluted shares from the Ohio well will have already been realized.
By the time of the reverse split, the series B preferred shares, currently being sold separately to investors for $2.5 million, will likely already have been converted into common shares, giving a total of 120 billion shares outstanding, best I can tell. Actually, it would be 140 billion total if the 15 billion the two directors hold gets doubled also.
It is all very complicated, to be sure, but I think the current share structure is designed to keep the company from being taken over, to keep it from going bankrupt, and to reward those who invested in the company to keep it going.
I would also add that it looks like holders of the series E preferred (us) may have the option of simply holding their preferred shares and not converting them into common.
One final point. Why the dividend of preferred shares to the common at this point? In my mind this is to compensate the holders of the common to some degree for the fact that total common shares are being diluted up to possibly 140 billion shares, once all is said and done.
Cropduster
