Vystar Corp (VYST)

[TenKay]

Technically what it means is that the company financials need to be such that if the company was wound up there needs to be sufficient liquid assets to pay off ALL debt holders/creditors and any preferred stock holders. Then the amount of the “distribution” (either buyback or dividend) can not exceed the excess capital left.

The prohibition mentioned in almost all State corporate statutes is simply there to protect the rights of creditors and preferred shareholders to their priority claims to the company assets.