Something that I have not seen mentioned in regards to the R/S...
The biggest unique negative factor inherent in enacting a 1:20 R/S of the commons and not the preferred shares IN THE SINGULAR CASE OF TRTC, is not merely the ratio of the R/S or the fact that the preferreds are protected
BUT... The ratio of the preferred to common shares before and after the R/S
If you look around at other pennies, the vast majority of them typically have the preferred shares outstanding making up btwn 1%-5% of the authorized shares, for example 5M preferred shares, 95M common shares and 100M total shares authorized.
However, with TRTC there are 2 very striking differences -- the 1st one is that they had 25M preferred authorized and 350M common authorized. So, the preferred shares would seem to make up 25/375 or 7%, which is pretty high. But, 7% is not the correct number because each preferred share is worth 5.4 common shares. So, in actuality TRTC had authorized 135M preferred shares and 350M common, so the correct % is actually 28%! This is what is REALLY UNIQUE about TRTC's share structure. And this extremely high % of preferred shares with respect to common shares is WHY a R/S may be more uniquely devastating in the case of TRTC in comparison to an entity with a more typical share structure which undergoes a R/S.
As a result of such an elevated ratio, as others have mentioned, the swing in insider ownership that will occur as a result of the R/S is nearly unprecedented, going from about 25% to 85% (immediately after the R/S not taking into account all of the new preferred and common shares that can now be disbursed) and the degree of dilution to the common shareholders is equally great. For comparison's sake, let's take the more typical share structure ratio I cited above -- 5M protected preferred and 95M common and run that entity thru a 1:20 R/S -- You would wind up with 5M preferred and 5M common and the common ownership would drop from 95% to 50%, roughly cut in half...
In comparison, when all new common and preferred TRTC shares are factored in with the raise in authorized to 990M shares, the common shareholders go from composing about 75% down to about 10%, which equates to an 87% reduction in ownership. The ramifications of this are virtually myriad and I'm not in the mood to write more stuff today, but suffice it to say that there are a number of scenarios that could play out with respect to price action as well as the future existence of TRTC as a public entity. And with each of these scenarios, there is a wide latitude in the probability spectrum of what will actually take place.
So the extremely high ratio of preferred shares to common shares is a very unique factor that discriminates TRTC's proposed R/S from others who have enacted reverse splits where the preferreds are similarly protected.
Just some food for thought....
