Material Effects of Proposed Authorized Share Increase
The amendment to our Restated Articles of Incorporation, as amended, to effect the Authorized Share Increase will not change the terms of our common or preferred stock. After the Authorized Share Increase, the par value of our common or preferred stock will remain unchanged at $0.001 per share and shares of common or preferred stock will have the same voting rights and will be identical in all other respects to the common or preferred stock currently authorized. Immediately following the Authorized Share Increase, we will continue to have the same number of stockholders and we will still be subject to the periodic reporting requirements of the Exchange Act.
The Authorized Share Increase will permit us to issue 24,000,000,000 additional shares of common stock or other securities that could be converted into common stock such as options, warrants, preferred stock or debt over our current limit of 6,000,000,000. To the extent that we issue new shares of common stock, or additional shares are issued based upon the exercise of newly issued options or warrants, the ownership percentage of each share will decrease. This dilution may have the effect of reducing our stock price.
The Authorized Share Increase will affect the shares of all of our stockholders uniformly. To the extent that the Authorized Share Increase has the potential to dilute the ownership percentage of shares, it does so to the same extent for all stockholders of common stock.
