Intl BioChemical Industries Inc fka IBCL

[GGraessle]

Invest in Kids

"I don't understand is why REDUCING the number of shares (via the reverse split) is necessary."

Ok - let me take another shot at this.

1. Hicks has preferred shares, some 11 million worth or some thing in that neighborhood.

2. According to the agreement Hicks can convert those preferred shares to common shares so he can "sell" them and recoup his investment. The conversion is in the agreement and uses some formula.

3. IBCL is authorized to have 100 million shares outstanding.

4. IBCL has issued all 100 million shares.

5. IBCL has no more shares to issue and hence can not convert Hick's preferred shares to common.

6. IBCL needs to do a reverse stock split so it can get under the 100 million authorized and once again issue more shares so Hicks can convert preferred shares to common shares.

Obviously number 6 is the reason, and 1 thru 5 support it or provide the basis.

However, and here is the catch. In order for IBCL to do a reverse split it has to be approved by the shareholders of those 100 million. If a majority vote no, then in effect Hick's is stuck.

Does that explain it?