Here is the explanation:
Please note NSH is the private company. The pubco is SHMP.
There is one matter that is of my opinion so I will state IMO.
On 1/30/2015, an asset purchase was completed between NSH (the private company) and the public company. All assets of NSH were exchanged for 75,520,240 pubco shares.
On August 15, 2018, NSH exchanged 75,000,000 shares of the pubco for 5,000,000 Series A shares. Upon a majority vote by the NSH shareholders and beginning on 8/15/2029, the Series A shareholders could convert into half of the shares of the company upon majority vote. These Series A shares were controlled by NSH which was run by Bill Williams and Gerald Easterling (note this transaction was not legal. I am not insinuating or even inferring criminal liability. It is a civil matter. What is the issue? All shareholders of any class of securities must be offered the same offer, compensation, benefit. Only the NSH shareholders received the Series A. This can't be done and be compliant with Nevada law. This is a fact)
IMO,the above transaction was done because the company was running out of authorized shares. Within weeks, they increased the authorized shares in Nevada.
On or around August 11, 2020, Gary Shover filed a lawsuit against the pubco stating he never received his shares. Note, the lawsuit was not filed against NSH which at the time the lawsuit was filed owned a Series A preferred that upon majority vote of the NSH shareholders, they could convert into half of the pubco shares.
When the lawsuit was filed, Gary Shover's attorney was a shareholder of NSH and so was the attorney's brother. Neither was listed as a plaintiff and since Steve Walker was practicing law and securities law for decades, it is hard to believe he didn't know the terms of the preferred.
Now, here is where it gets interesting. First, Shover sued the wrong plaintiff. Any first year law student could have gotten the case dismissed because Shover had zero standing to sue the pubco. The pubco issued the common shares in 2015 and did the exchange for the Series E in 2018. It was only NSH (the private company) that had the right to distribute the 75,000,000 shares to their own shareholders and only NSH had the right to vote the Series A. Any first year law student could have gotten the case dismissed. Perhaps even more interesting, all NSH shareholders received a letter directly from THE CHEF offering them the opportunity to agree to the proposed distribution post lawsuit. The lawyer did not send the letter. The Chef sent it.
When the Shover lawsuit was filed, both parties kept the judge completely in the dark about how many shares the Series A was convertible into. If the judge was told, he could not have approved the exchange because the shares that NSH rshareholders received was less than what they would have received if they just voted as a majority to convert the Series A. In other words, the 3a10 exchange is unfair mathematically. This is a fact.
Now we move to the court approved settlement which was proposed by Both parties. The NSH shareholders, in exchange for the NSH shares (private company shares) received public company shares. LET ME MAKE IT PERFECTLY CLEAR. THE PUBLIC COMPANY HAD NO BASIS TO AGREE TO THIS. WHEN THE ASSET PURCHASE OCCURRED IN 2015, NSH RECEIVED SHARES. IT WAS NSH'S RESPONSIBILITY TO DISTIBUTE THE SHARES TO THEIR SHAREHOLDERS. THEY THEN EXCHANGED IN 2018 THE SHARES FOR THE SERIES A WHICH ALLOWED THEM TO CONVERT INTO HALF OF THE COMPANY. THERE WAS NO LEGAL BASIS FOR THE PUBCO TO AGREE TO THIS. IN THE END, NSH STILL OWNS THE SERIES A PREFERRED EFFECTIVELY CONTROLLED BY GERALD EASTERLING AND THE NSH SHAREHOLDERS ESSENTIALLY HAVE THEIR ORIGINAL SHARES THEY RECEIVED IN 2015 PLUS THE SERIES A. THEY KEY WORDS ARE PLUS THE SERIES A.
Hope this makes sense
