Encore Energy Systems Inc (ENCS)

[PENNIEStoSTACKS]

"receive, pro rata, $2,000,000 in Convertible Preferred Stock. The Preferred Stock may be converted into Common Stock annually. The Conversion feature will expire in 5 years.

This dividend is in addition to the previously declared cash dividend whereby all royalty income from the Company's patents will be distributed directly to stockholders. Shareholders will receive new Preferred Stock paying yearly dividends of cash or common stock upon redemption."
http://finance.yahoo.com/news/Encore-Energy-Systems-iw-14324403.html


Will those added shares be used to cover the conversion of the prefferred stock?