InterCloud Systems Inc. (ICLD)

[Monte_Cristo]

The 500 million authorized shares will not be reduced. Only the outstanding shares will be reduced by a factor of up to 4. This newly formed "gulf" between the number of authorized shares and the new (now reduced) number of outstanding shares will allow for further dilution as the convertible loans are turned into added outstanding shares. Some of the loan agreements, like the one contained in the most recent 8-K filing, require ICLD to reserve a set amount of the outstanding shares for loan conversions (whether pre-R/S or post-R/S). There will be further dilution*, that's why they're doing the R/S.

*Unless there's some remarkable news that convertible loans have been replaced with non-convertible paper. But non-convertible paper will have higher interest rates as there's no security attached to them.