iTalk Inc. (fka TALK)

[lloydm]

What Happens to a Preferred Stock in a Buyout?

This is what I think will happen to TALK (Buyout). That IMO is why Lee converted preferred shares into common shares.

When a company is bought out by an individual or another company, the purchaser will usually take possession of all of the common or voting stock of that company. The buyer can offer cash or the stock of its own company in exchange for the target company’s stock. As preferred shares are generally not voting shares, it is not necessary that the purchaser redeem or buy them out when taking over a company. The buyer has the same options as the original owner in dealing with the preferred shares
http://smallbusiness.chron.com/happens-preferred-stock-buyout-68487.html

www.otcmarkets.com/edgar/GetFilingHtml?FilingID=11143849
Upon Closing of the Exchange, UMS became a wholly owned subsidiary of the Company and the Company’s pro-forma shares of Common stock and Preferred Stock issued and outstanding after giving effect to the Exchange was 1,875,000,000 shares of Common Stock and 106,250 shares of Preferred Stock, convertible into 10,625,000,000 shares of Common Stock of the Company (representing approximately representing 85% of the Company’s fully diluted Common Stock

The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), for the issuance of the Preferred Stock to Mr. Lee, pursuant to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder because, among other things, the transactions did not involve a public offering, Mr. Lee acquired the securities for investment and not resale, and we took appropriate measures to restrict the transfer of the securities.