Of course, the reasons that would prompt corporate officers to ask shareholders to ever increase new or expanded share authorizations must be carefully considered. Right now, Freestone is apparently authorized to issue up to 100,000,000 shares. At the upcoming shareholders’ meeting, the company will ask for authorization to offer up to 200,000,000.
Why might they be asking for this? Each will have to do his or her own due diligence on this. Offhand, I can find only two reasons the company might want to expand this number.
The first, in my opinion, is virtually without merit or application in this case. That would be to simply be able to raise corporate revenues by selling new shares, in the absence of other corporate revenues. This can be a measure of desperation for companies under financial stress and with reduced promises of expanded operations.
None of those conditions, in my opinion, apply to Freestone. Each will have to make their own decision on this. (A few posters have already expressed their strong reservations about the company and its product and their futures, raising the question of why they even post here. Obviously, this is not the sort of company they want anyone to consider, given the perceived deficiencies they have expounded upon.)
The second, very reasonable and considerable reason to expand authorized shares would be in anticipation of joint ventures and private placements with new corporate partners. Freestone is in no position to economically borrow large funds for development and implementation of their transformative EncapSol technologies. Joint ventures with other large corporations, however, can offer productive outcomes, in return for shares of Freestone.
I would presume that any of these new shares would take the form of 144 lockup shares, where the recipient is prohibited from selling any for a year or more.
Right now, who knows who Freestone executives are or have been talking with. We already know that they’ve been to Louisiana for more than a sociable business lunch. The likes of Michael McGhan don’t do these little chats and jaunts just to be friendly.
Just why Freestone wants to expand the authorized shares is yet unknown. But I’m certain that it’s neither an act of desperation nor futility. Something’s up with this. I’m eager to learn of new corporate alliances, etc.
