Monday, March 14, 2016 1:42:22 PM
1.) Tom wants to convert the 20 million preferred shares that have a $0.20 valuation (Max conversion value of $4 million dollars) into restricted common shares. If the share price is at .20 then it's a full valuation conversion and only 20 million shares are added to the common shares.
2.) He plans on reverse splitting the common shares.
The question is still at what point will he reverse split? It will obviously have to be before the conversion of the preferred shares. There are two figures in play here. Tom's estimation that the stock should be valued at $0.05 per share and the Series C Preferred that convert at $0.20 per share.
His goal is more than likely to get it up to $0.05, or as close as possible to that, before the reverse split to take it up to $0.20. Whatever the split ratio turns out to be will end up determining how those 20 million converted shares will impact the issued share structure.
RS @ .01 at 20:1 = 0.20. The 4.2B issued become 210M and the 20M converted are added to that for a total of 230M issued and 278M A/S.
RS @ .02 at 10:1 = 0.20. The 4.2B issued become 420M and the 20M converted are added to that for a total of 440M issued and 556M A/S.
RS @ .05 at 4:1 = 0.20. The 4.2B issued become 840M and the 20M converted are added to that for a total of 860M issued and 1.04B A/S.
The worst case scenario would have the split occur as follows where the 20M converted shares added to the existing O/S, after it splits, resulting in the O/S maxed out to the A/S level so that most of the Authorized are Issued:
RS @ .004 at 50:1 = 0.20. The 4.2B issued become 84M and the 20M converted are added to that for a total of 104M issued and 111M A/S.
This is all hypothetical based on that 10-K statement but within the realm of possibility. Either way any of these go, the company is in a position to continue the expanding production of content but at the same time is more attractive to larger investors. That's due to the percentage of the float being less of the overall common share structure. This results in a minimal effect of any flipping on the share price.
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