Michelex Corp (fka MLXO)

[sawdin]

Gramuglia filed two separate Form D's w/ the SEC in 2007 when he sold $500K worth of 'Units of 10% Convertible Notes and shares of common stock".

From the SB-2 filed 12/04/06 there were 105MM shares of common stock; I'm not sure if that includes approximately 37MM shares eligible for resale that were potentially held by AJW (NIR/Ribotsky):

Common Stock.
We are authorized to issue up to 1,000,000,000 shares of common stock, par value $.001. As of September 30, 2006, there were 105,871,037
shares of common stock outstanding.

I don't know what happened between 2006 and 2010 that resulted in the OS being 1B. Per the IBOX:

Issued, subscribed and paid up:1,000,000,000 common shares.

Restricted Shares:Restricted shares owned by officers and directors are about 18 percent.

Float: Other than the 18 % restricted, rest of the shares are freely tradable or would be in very near future.

Authorized Preferred shares:10,000 Preferred shares,

Issued, subscribed and paid up; 10,000 Preferred shares
All of the preferred shares are restricted.

18% would be 180MM shares held by officers. Typically, those shares are restricted for one year, though it can be longer. The 10,000 preferred shares is the white elephant in the room. Can those shares be converted into common shares? If so, at what level of conversion (1:1 or 1:whatever?). Yes, the AS is listed as 1B and there are already 1B shares issued. However, the board can authorize that the AS be bumped up and then the preferred shares could theoretically be converted. These types of shenanigans happen all too often with pinksheet stocks. That is why transparency (e.g., an un-gagged TA and regular filing of forms via EDGAR) is critical.

FWIW, I heard that as part of the RM that Tom Gramuglia had to give up about 1/2 of his shares but that he would still own 25% of the company after doing so. However, I can not verify the veracity of that rumor.