Green Envirotech Holdings Corp (GETH)

[pennypauly]

Management determined to proceed with the Recapitalization in an effort to increase our available resources to provide capital for future funding of our operations. We currently have convertible notes, convertible debentures, and 144,100 shares of Series B Preferred Stock outstanding (the “Convertible Securities”). The Convertible Securities provide generally that after some period of time, the holders can convert the principal and accrued interest under the Convertible Securities into shares of our common stock at discounted conversion prices as set forth in the applicable transaction documents. In addition, the Convertible Securities require that we give our transfer agent irrevocable instructions to hold a number of authorized but unissued shares of our common stock in reserve for future issuance. Although we currently have only 48,609,224 shares of common stock issued and outstanding, the holders of our Convertible Securities have currently reserved all of the remaining 201,390,776 authorized, but unissued, shares of our common stock. This leaves us unable to issue any more shares of common stock as long as those shares remain reserved.