As Seen On TV, Inc. (fka ASTV)

[SDSU Fan]

The following is taken from the 8k. Reason for the increase and effects of the increase.


Reason for Increase

In order to permit us to raise capital or issue our Common stock for other business purposes, we need to increase the number of shares of our Common Stock authorized for issuance under our Articles of Incorporation. As a result of the increase in authorized Common Stock, the Company will be able to issue shares from time to time as may be required for proper business purposes, such as raising additional capital for ongoing operations, establishing strategic relationships with corporate partners, acquiring or investing in complementary businesses or products, providing equity incentives to employees, and effecting stock splits or stock dividends. While the Company currently has no formal agreement to issue any additional shares in excess of our currently authorized Common Stock, we are considering non binding proposals for private financings. The Company currently requires additional cash resources and is seeking to increase cash reserves through the sale of additional equity or debt securities. The sale of convertible debt securities or additional equity securities will result in additional dilution to our shareholders. As the Company is considering several proposals and all proposals are subject to conditions to closing and the negotiation of definitive terms, it is impracticable to describe any potential transaction. Furthermore, the Company can not provide any reasonable assurances that any proposal will be completed, nor can it determine the dilutive effect it would have on the Company’s current shareholders.

In connection with any future issuance of common stock (up to 750,000,000 shares), there will not be any additional shareholder approval required with respect to the additional shares.



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Effects of Increase

In general, the issuance of any new shares of Common Stock will cause immediate dilution to the Company's existing stockholders, may affect the amount of any dividends paid to such stockholders and may reduce the share of the proceeds of the Company that they would receive upon liquidation of the Company. Another effect of increasing the Company's authorized Common Stock may be to enable the Board of Directors to render it more difficult to, or discourage an attempt to, obtain control of the Company by means of a merger, tender offer, proxy contest or otherwise, and thereby protect the continuity of present management. The Board of Directors would, unless prohibited by applicable law, have additional shares of Common Stock available to effect transactions (such as private placements) in which the number of the Company's outstanding shares would be increased and would thereby dilute the interest of any party attempting to gain control of the Company, even if such party is offering a significant premium over the current market price of the Common Stock. Such an issuance of shares of Common Stock would increase the number of outstanding shares, thereby possibly diluting the interest of a party attempting to obtain control of the Company. The Board of Directors is not aware of any attempt, or contemplated attempt, to acquire control of the Company, and this resolution was not presented with the intent that the increase in the Company's authorized Common Stock be utilized as an anti-takeover measure.