Chef, I have only briefly scanned the various proposals and plan on giving them more attention in the next couple of days. As I read the proposal regarding the increased shares, I believe that the proposal is to double the number of common shares. As written at the time BEFORE the reverse split, it contemplated an increase of 750,000,000 common shares for a total of 1,500,000,000 shares. Doing the math to reduce by the 1 for 100 R/S, I figure that it will be 15,000,000 common shares. This would dilute our interest by 50% IF the new shares were issued. The stated reason of management being able to use the newly authorized shares for a variety of reasons, but specifically stating that they were not conceptualized as a means of thwarting a hostile takeover, is of some concern to me. I get the need for flexibility in potential acquisitions and transactions, raising capital and employee incentives, but I am concerned that the stated intention of the new shares is NOT to create a barrier or at least impediment to a hostile takeover. That there is nothing in place already is of concern, and that there does not appear to be strategic actions being made or planned to correct this is of greater concern.
I do not like the idea of the 50% dilution in my ownership and depending on the price for the new shares some unknown decrease in share value, but do get the idea that there may be some need to access $$ quickly. I recall the private placement just about three years ago at .01 a share when the pps was around .04 (please, these are just roughly remembered values...but the idea is accurate) and how that created a lot of concern. Certainly keeping the doors open is the primary rule. DO NOT RUN OUT OF MONEY ....DROOM but that there was no offer to current shareholders to participate in that placement strikes me as wrong - and struck me as wrong at the time. I would have gladly purchased more shares at the .01 value. As I have said before, I do have confidence in Mark and the current board, unlike some people here who do not. I do not assume that the new shares are necessarily a bad thing, but I do have concerns.
I am inclined to vote against the increase. I am not saying I have decided, just an initial inclination which I will firm up or reject after I have more carefully read and thought about the proposal. Just trying to give my understanding of the number of shares and broad outline of my thinking about the impact of increasing the authorized shares by 100%
patience and GLTA
