Voip Pal Com Inc (VPLM)

[rapz]

For the control of the company the CEO might have stipulated to keep 40% of the outstanding shares per the anti-dilution clause. A simple math shows how the a-d clause actually was diluting the company shares so far.

Suppose the share price is $1. The company can raise equity capital of $10 by selling 10 shares at $1/sh. Due to the a-d clause, to meet the 40% condition for the CEO, they actually issue 16.67 shares (6.67/16.67 = 40%) and give the CEO the extra 6.67 shares to get the 40% condition. Extra shares were issued every time they sell shares to raise equity. Think about appx 620 million shares converted to warrants now. Were they given free or as compensation?

Shareholders should be relieved that such dilution in the name of anti-dilution clause is not there anymore. If a buyout offers $1/sh, common share "value" is about $1/sh for all shareholders including the CEO.