There are a number of reasons for the A/S increase... share dilution happens with small companies in order to grow the business. Also, the A/S increase has protective measures regarding attempts to take over control of of a small company... and there will be a few shares included for stock options for company directors. Based on the number of current shares, I think Dean has enough votes to follow through on this proposal.
Here's how it reads:
"PROPOSALS TO BE VOTED ON
PROPOSAL NO. 1
AMENDMENT TO ARTICLES OF INCORPORATION TO INCREASE AMOUNT
OF AUTHORIZED COMMON STOCK
As described in the accompanying NOTICE, the Company proposes to amend its Articles of Incorporation in order to increase the number of authorized shares of the Company's common stock from 500,000,000 to 750,000,000, par value $0.001 per share (the "Common Stock Articles Amendment"). As of November 2, 2009 and before the increase in authorized shares, 430,420,592 shares of the Company's common stock are not reserved for any specific use and are available for future issuance. As of November 2, 2009 and after the increase in authorized shares, 319,579,408 shares of the Company's common stock are not reserved for any specific use and are available for future issuance, except that the Company may set aside shares (currently estimated to be 16,000,000) to be authorized for a customary stock option plan for the Company's directors, officers, employees and key consultants in the future. The Company's Board of Directors has not yet adopted such a plan and is not certain when the plan will be adopted. If and when such a plan is adopted, the Company will then submit it to the shareholders for a vote to ratify it..
The Board of Directors of the Company voted unanimously to implement the Common Stock Articles Amendment because the Board of Directors believes that an increase to the number of authorized shares of the Company's common stock will allow the Company to raise part of the capital necessary for the Company to grow its business in the future.
The Company is not expected to experience a material tax consequence as a result of the Common Stock Articles Amendment. Increasing the number of authorized shares of the Company's common stock may, however, subject the Company's existing shareholders to future dilution of their ownership and voting power in the Company.
POTENTIAL ANTI-TAKEOVER EFFECT
The additional shares of common stock that would become available for issuance if the proposal were adopted could also be used by the Company to oppose a hostile takeover attempt or delay or prevent changes in control or management of the Company. For example, without further stockholder approval, the Board could strategically sell shares of common stock in a private transaction to purchasers who would oppose a takeover or favor the current Board. Although this proposal to increase the authorized common stock has been prompted by business and financial considerations and not by the threat of any hostile takeover attempt (nor is the Board currently aware of any such attempts directed at the Company), nevertheless, stockholders should be aware that approval of this Proposal No. 1 could facilitate future efforts by the Company to deter or prevent changes in control of the Company, including transactions in which the stockholders might otherwise receive a premium for their shares over then current market prices."
