Side...this is my take on the new "Effect" filing. The Effect filing is to show that the S-3 is now effective. I believe this to mean that the shelf registration has been approved by the SEC and is now effective. This means ERHC can issue up to $50 million dollars worth of new shares at their will....in one or more transactions....without shareholder approval.
I'm "hopeful" that this registration is to shun any hostile offers made so SEO's deal is protected. I'm hopeful that a buyer has insisted on this filing to protect the deal they have been working on from any other offers that may come. Basically a protection move.
I expect to see this newest Effect filing to be amended because it referenced the S-3. I think they forgot they amended the S-3 TWICE now....and this "Effect" filing should have referenced the S-3/A. We'll see.
Side...I see it as good. If I'm wrong and the shelf registration is for their STATED growth purposes ($$$ for acquistitions)....then it gets scary IMHO. I strongly suspect any growth would have to come with new management to work (i.e. buy-in for new control).
Here is the "Anti-Provision" section of the S-3/A I am referring to:
Anti-Takeover Provisions
Some provisions of our amended articles of incorporation and our bylaws may be deemed to have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that a shareholder might deem to be in the shareholder’s best interest. The authorized but unissued shares of our common stock and preferred stock are available for future issuance without shareholder approval. These additional shares may be used for a variety of corporate purposes, such as for additional public offerings, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise. In addition, our board of directors is authorized to make, alter or repeal our bylaws without further shareholder approval.
