PharmaCyte Biotech Inc (PMCB)

[pennyvestor]

This explains all about the preferred stock offering. Taken from page 4 of the proxy statement.

https://content.equisolve.net/_76803de5f2d1d72f01142193aef36499/pharmacytebiotech/db/191/429/pdf/attachment+1.pdf

ITEM 1 — Approval of Articles Amendment to Provide the Board the Power to Designate the Rights and Preferences
of PharmaCyte’s Preferred Stock
Authorization of “Blank Check” Preferred Stock
On August 10, 2019, our Board unanimously approved the Articles Amendment to provide our Board the power to
designate the rights and preferences of our preferred stock. Our current Articles authorize 10,000,000 shares of preferred stock,
such preferred stock is not “blank check” preferred stock. The term “blank check” refers to preferred stock, the creation and
issuance of which is authorized in advance by our stockholders and the terms, rights and features of which are determined by our
Board upon issuance. The authorization of such “blank check” preferred stock permits our Board of to authorize and issue
preferred stock from time to time in one or more series without seeking further action or vote of our stockholders. The Articles
Amendment will not increase or decrease the number of authorized shares of preferred stock. Rather, the Articles Amendment
makes the authorized preferred shares blank check preferred shares.
If the Articles Amendment is approved, the Board will have the power to authorize and issue preferred stock from time
to time in one or more series without seeking further action or vote of our stockholders, and the Board will designate the rights
and preferences of any such series. Subject to the provisions of the Articles Amendment and the limitations prescribed by law,
our Board would be expressly authorized, at its discretion, to adopt resolutions to issue shares, to fix the number of shares and to
change the number of shares constituting any series and to provide for or change the voting powers, designations, preferences
and relative, participating, optional or other special rights, qualifications, limitations or restrictions thereof, including dividend
rights (including whether the dividends are cumulative), dividend rates, terms of redemption (including sinking fund provisions),
redemption prices, conversion rights and liquidation preferences of the shares constituting any series of the preferred stock, in
each case without any further action or vote by our stockholders. Our Board would be required to make any determination to
issue shares of preferred stock based on its judgment as to what is in the best interests of PharmaCyte and our stockholders.
The Board believes that the authorization of the blank check preferred stock will provide PharmaCyte with increased
financial flexibility in meeting future capital requirements. It will allow preferred stock to be available for issuance from time to
time and with such features as determined by our Board for any proper corporate purpose. In addition, if the Articles Amendment
is approved by stockholders, following the filing of the Articles Amendment with the Secretary of State of Nevada, the Board
intends to designate a series of preferred stock with supermajority voting power (“New Series”) and to issue one or more shares
of such New Series to an officer of PharmaCyte. It is expected that such officer will vote his shares of the New Series to approve
a certificate of amendment to the Articles that will have the effect of increasing the authorized shares of PharmaCyte’s Common
Stock. The Board believes that additional authorized shares of Common Stock will provide PharmaCyte with increased financial
flexibility in meeting future capital requirements. However, PharmaCyte has no present plans or commitments for the issuance
or use of the additional shares of Common Stock that may be authorized.
If the Articles Amendment is approved, it will become effective upon the filing of the Articles Amendment with the
Secretary of State of the State of Nevada.
Effect of Proposal 1 on Current Stockholders
The issuance by PharmaCyte of preferred stock could dilute both the equity interests and the earnings per share of
existing holders of our Common Stock. Such dilution may be substantial, depending upon the number of shares issued. The
newly authorized shares of preferred stock could also have voting rights superior to our Common Stock, and therefore would
have a dilutive effect on the voting power of our existing stockholders.
Any issuance of preferred stock with voting rights could, under certain circumstances, have the effect of delaying or
preventing a change in control of PharmaCyte by increasing the number of outstanding shares entitled to vote and by increasing
the number of votes required to approve a change in control of PharmaCyte. Shares of voting or convertible preferred stock could
be issued, or rights to purchase such shares could be issued, to render more difficult or discourage an attempt to obtain control
of PharmaCyte by means of a tender offer, proxy contest, merger or otherwise. The ability of our Board to issue such shares of
preferred stock, with the rights and preferences it deems advisable, could discourage an attempt by a party to acquire control of
PharmaCyte by tender offer or other means.
Vote Required
Proposal 1 will be approved if the votes cast by the holders of the shares represented at the meeting and entitled to vote
exceed the votes cast opposing the action (with “abstentions” and “broker non-votes” not counted as a vote cast with respect to
that matter). This means that the number of shares voted “FOR” Proposal 1 must exceed the number of shares voted “Against”
Proposal 1.