SirFelix: You may want to read the Exhibits.
I've got Bylo on iggy so I don't know what he's saying about this, but this type of offering IMO is what some people were afraid of when VTSI asked to raise the A/S to 500M.
A couple of things you need to note:
- the Proposed Maximum Offering PPS is $0.04, that does not mean all shares are being offered at $0.04 (and can't be exercised unless the PPS is above that level). Most of these shares could be offered at .02 or lower if the PPS continuous to languish at it's current level, especially if they need to use shares to pay a consultant. Which brings me to the next point.
- the Exhibits clearly state that these shares are not set aside for employees only.
The Registration Statement relates to the issuance from time to time of 18,274,499 shares of the Company’s common stock, $0.005 par value per share (the “Stock”). The Stock is to be issued to current employees of the Company, as well as to consultants to the extent permitted by the General Instructions to Form S-8 (such Stock issuance being herein referred to as the “Plan”).
This type of "Stock Option Plan" is a nice way to dilute shares while giving the illusion you are "rewarding" employees. I have seen it done by several other OTCBB's. In fact, one of these other companies titled the offering "Employee Stock Option Plan", yet in the history of the plan, not a single share ever went to an employee, tens of millions went to pay consultants as payment for services, the shares went straight into the market. This type of "plan" is a nice way for companies to avoid the types of financing Dutchess or Cornell offer and just dilute the stock themselves to pay the bills. It costs less shares this way.
You will also note they left open the option to amend the plan in the future (by way of filing a prospectus), which usually means issuing more S8s as the need for cash arises. This is not a good thing, I think people that were afraid of giving the General an "open check book" by raising the A/S to 500M shares have just seen the beginings of their fear turning to reality. Of course, only time will tell. If they make the sales, no problem, if they don't, watch the share count escalate. All, again, IMO
