Here is a question I have been trying to research. Must a company show, as part of the Outstanding Shares (O/S), those shares that could be issued from existing Preferred (convertible) shares held by a Convertible Preferred Share Holder?
Plenty of sites will explain Convertible Preferred Shares, but none explain the impact on share structure, specifically the O/S.
As an example, are Zaric's 323,835,533 shares already shown as part of the O/S? Or are those shares not shown as O/S shares, until that Share of Series A Preferred Share is converted to common shares?
My question does not just concern HPTG. I hold another security, of which "Insiders" have made some promises to common share holders. One of those promises was no dilution for 3 years. However, in the same 8K, they made note of reducing their Preferred share conversion rate from 50 common for each 1 preferred to a 1 to 1 ratio.
Now here is the crux of the matter. We all know the word dilution. However, there are 2 different forms. There is dilution to the O/S, in most cases not a real problem, except for earnings reports. However, the greater impact to share holders share value lies in dilution to the Float or (Issuance of shares )freely traded shares in the market place.
So, what I am getting at here, if have not already guessed is, that 8K was technically correct when claiming/promising no dilution. However, that promise may only apply to the O/S and not to the number of Freely Traded Shares in the Market Place. (The later having a greater impact to share value, than just the number of O/S shares). Insiders could sell shares into the market, without seeming to dilute the share structure, as they promised.
Do you know if shares potentially converted by preferred share holders must be shown as O/S shares or only available from the Treasury and added to the O/S upon conversion of Preferred Shares?
WE MUST ALL REALIZE THE DIFFERENCE BETWEEN HOPE & EXPECTAION BASED ON GIVEN FACTS.
