Tuesday, August 02, 2011 2:42:00 PM
1 + 1 = 3 ? LOL
Authorized Shares Increase Possible Reasons:
The first reaction of many is the hated DILUTION scare.
But the Board of Directors may have other valid reasons to increase the Authorized number:
1.To use as collateral for capital financing, lines of credit &/or loan programs
2.To reserve shares for options/warrants.
3.To raise capital for expansion.
4.To expand the product line through acquisitions.
5.To establish strategic relationships with other companies.
6.To provide equity incentives to directors, officers, employees, consultants.
7.To create an employee stock ownership plan.
8.To protect the company from hostile takeover.
9.To use as a means of establishing subsidiaries based upon patents
10.To provide as restricted's for partners in JV programs.
11.To use for Cross-Listing shares on a foreign stock exchange that can lead to increased stock liquidity and a decrease in a cost of capital.
12.The most hated is used to scam investors in diluting for no other purpose than to fill the ceo's pockets.
$TYTN
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