OTCMarkets may not care, but SOMEBODY should.
In support of their OTCQB application ISBG was required to submit a copy of their current version of their Articles of Incorporation:
"A complete copy of the issuer’s articles of incorporation or in the event that the issuer
is not a corporation, the issuer’s certificate of organization. Whenever amendments to the
articles of incorporation or certificate of organization are filed, a complete copy of the articles of incorporation or certificate of organization as amended shall be filed."
On 5/25/18 the Company submitted an undated copy of an "Amended and Restated Articles of Incorporation" that had no receipt date affixed by Nevada appearing on it. No subsequent submission has been made by the Company.
That document indicated that the Company had 480,000,000 authorized common shares. On the last page under "Article XIV Reverse Stock Split" the Company said it had "obtained required approval of stockholders" and that:
"The number of previously authorized and outstanding shares will be reduced in the ratio of 1:255, with an effective date of September 6, 2017."
The Company ByLaws, submitted to OTCMarkets on the same day, require that shareholders be provided notice that a vote (either with or without a meeting) of between 10 and 60 days. No notice was provided, so the Company hadn't LEGALLY "obtained required approval of stockholders". The fact that Alonzo Pierce has perpetual rights to 2/3 of the votes in any issue requiring a vote doesn't act to deprive all of the other shareholders of their right of Notice.
More importantly the number of previously authorized and outstanding shares WAS NOT reduced in the ratio of 1:255, with an effective date of September 6, 2017. The previous authorization was for 9,950,000,000 common shares so the new authorization should have been a little over 39 million (9,950,000,000/255). Instead the new authorization was submitted to the State of Nevada as 450,000,000...over 10 times the amount indicated by the statement in the Company's Articles.
On June 26,2018 the Company issued a press release that included the following statement:
"The total number of shares authorized for potential issuance has been reduced by the Company from 480 million to 220 million."
That wasn't quite right. Based on the records of Nevada the COMMON share authorization was reduced from 480 million to 200 million. The TOTAL share authorization, including 20 million Preferred shares was reduced from 500 million to 220 million.
The press release did not say how that change came about...whether approved by the Board, the Shareholders or both. No submission, as required (see paragraph 2 above), of an Amended Articles of Incorporation has been made to OTCMarkets based on the Company's Filings and Disclosure list.
So:
Neither of these corporate actions was preceded by a properly noticed shareholder vote.
The most recent Amended Articles of Incorporation submitted to OTCMarkets indicates that the total Common shares Authorized should be 39 million and the most recent submission to Nevada indicates that it is 200 million.
Those are the facts.
Why didn't the Company reduce the authorization number to 39M in September of 2017 as they said they would in their Articles of Incorporation?
That's easy. Pierce new that he would exceed that authorization quickly...and he did. It took him 6 months (and that's without the 50M shares he issued to himself).
There oughta be a law, or at least a standard!
In fact there's a couple of them. The hard part is getting the people who should be enforcing them...OTCMarkets, the SEC, the State of Nevada...to care. But if shareholders don't care, why should they?
To be fair the agencies have their reasons:
OTCMarkets already got their application and annual fees.
The SEC has bigger fish to fry.
And Nevada, well hey it's Nevada. They're easy (that's why companies incorporate there).
And shareholders are just here to flip anyway.
But can it core A apple?
Yes Ralph, of course it can core A apple.
