Electronic Cigarettes International Group Ltd fka ECIGQ

[rayinbrooklyn65]

Management cannot "dilute into oblivion" because they are limited to the number of authorized shares; we are currently approximately just 40 million shy of the maximum authorized shares of 300 million.

The proposal to limit the further increase in the authorized shares to 50 million (down from the previous proposal authorizing an increase by 300 million shares) limits the amount of shares the company can issue to the maximum of 350 million which would be authorized under the revised proposal.

To put this in perspective, from the period of November 2014 to January 2015, shareholders witnessed an increase in outstanding shares from approximately 89 million shares to 240 million shares - nearly a tripling in the amount of shares that entered the trading market. Using these approximations, during this three month period this was a net increase of 151 million shares that entered the trading market (240 - 89 = 151); IF the ECIG Board of Directors issues the maximum amount of shares authorized under this new proposal (which is not to say they WILL, but I will use the worst case scenario here), then the most dilution that can occur is the issuance of an additional 110 million shares (60 million until we hit the current cap of 300 million + the additional 50 million proposed = 110 million).

If we managed to maintain a share price of 0.05 with the dilution of 151 million shares hitting the market in a relatively short time span of just three months with no earnings news to buttress the share price, I feel very confident the share price will not fall below 0.05 with the maximum dilution capped at 110 million additional shares.

I disagree. Depending on the specifics, mgmt could essentially dilute into oblivion and/or hold voting control simply from the preferred shares alone if it passes.