Ngen Technologies Holdings Corp. (fka NGRP)

[Det_Robert_Thorne]

Probably not the warrants, but reserved for conversion

That 35,397,217 shares is likely the amount of shares reserved for conversion by the existing convertible debt holders after the 1:2,000 reverse split.

The key to this interpretation is the following line from the Assignment and Amendment Agreement that Magnum referenced yesterday (11/20). Note the section that I've highlighted in bold font:

The Parties further acknowledge and agree that Liberated does not currently have a sufficient number of authorized but unissued shares of Liberated Common Stock so as to permit the Lenders to exercise their full conversion or exercise rights as set forth in the Assigned Agreements, but that Liberated is currently in the process of completing a reverse split of the Liberated Common Stock, without a reduction of the authorized shares of Liberated Common Stock, so as to permit Liberated to have a sufficient number of authorized but unissued shares of Liberated Common Stock so as to permit the Lenders to exercise their full conversion or exercise rights as set forth in the Assigned Agreements (the “Reverse Split”). Each of the Parties acknowledges and agrees that Liberated shall not be deemed in default or in breach of any of the covenants or agreements of the Assigned Agreements due to the failure to have a sufficient number of authorized but unissued shares of Liberated Common Stock so as to permit the Lenders to exercise their full conversion or exercise rights as set forth in the Assigned Agreements, unless the Reverse Split is not completed by December 31, 2019.

Each of the lenders probably have similar language in their convertible note agreements.

Right now, prior to the RS, LIBE has approximately $6.4M in convertible debt. In order to convert all of the debt to shares, at an average conversion price of $0.00009, you would need a little more than 71.1B shares authorized but unissued shares, but LIBE only has an AS of 6B. They could increase the AS to 100B shares at a par value of $0.001, but that would drive their annual NV business registration fees from about $2,100 (for an AS of 3B), to $99,000.

That explains the reason for the first part of the bolded portion of the quote.

The second part shows how LIBE will make the debtors happy again. The 1:2000 reverse turns that 71.1B shares into 35,397,217 shares reserved for the debtholders, which is only a small percentage of the new 3B AS.

Of course, as the debtors begin to convert again, without significant news to spur buying interest, the price of LIBE/NGen stock will fall, and more shares will have to be reserved, which is why the statement about the 35M shares in the DEF 14 also states:

Notwithstanding the foregoing, the Company may seek an increase in authorized shares of Common Stock as and when considered appropriate by the Board.

For example, if the stock price were to fall to $0.00021, the existing $6.4B debt would require a reserve of 3.04B shares which would put LIBE/NGEN over the new 3B AS.