Flexpower Inc. (FLXP)

[ratso1]

I wonder why Irwin refuses to identify the correct voting rights attached to the Class B preferreds? The ratio is 30,000,000 votes to 1 preferred share, not 20,000 to 1. I don't think he's ever gotten it right.

Here's an interesting situation they have created for themselves: The total votes of the 2,000 preferred shares is 60B. The AS is only 11B. That means that they created approximately 5.45X more votes than there are authorized shares. I actually don't think that is legal, but assuming no shareholder challenges it, it slips by. That works as long as there is just one holder of the preferred shares.

Now, we learn that Mr. Minaco has given some of his shares to Garr Winters. Obviously, Mr. Minaco and Garr are good friends. But, let's say that the two have a falling out, and Garr decides to call a special company meeting with his controlling shares (which would be anything over 183 preferred shares), and he decides to conduct critical business, and he can pass any business decision that a shareholder quorum would require by the company charter. However, Mr. Minaco owns the balance of the preferreds, and he decides to call his own special meeting and conduct his own business that is diametrically opposed to the meeting that Garr just had. None of this, of course, involves the common shareholder as your board of directors stripped that away from you.

So, you have two separate entities, Mr. Minaco and Mr. Winters, that have super voting shares that both represent quorums, which is a potential legal conflict, as there can only be one quorum.

Of course, we don't know how many preferred shares Minaco is giving him. It would be interesting to find out if it is more than 183 shares.