Lee6 thanks for your post. In my DD for Avalon I learned months ago that in May 2007 there was a 20 to 1reverse split. At that time there were 1 billion authorized as that change in the articles of incorporation happened in 2005, changing the authorized from 200 million to 1 billion.
What I found interesting in the sec filing after the date of the R/S, the authorized was stated at 50 million. The last filing which stated the 50M authorized was in the 10Q dated 8/19/2008 for the period ending 6/30/2008.
Than in the next 10Q filing dated 11/14/08, for period ending 9/30/2008, the authorized number reappears at 1 billion. No filing, press release, nothing, the number goes to 1 billion authorized. Why, because the articles of incorporation allowed 1 billion and that number was never changed legally. The SEC filings stating the authorized at 50 million were incorrect, looks to me like a breach of fiduciary responsibilities.
So what is different today, the articles of incorporation were change reducing the authorized common stock to 3,333,333 that is 3.33333 million shares.
We now have as of July 13, 2012, 927,297,330 shares issued of the 1 billion authorized. 300 to 1 means with the new authorized of only 3.33 million, we will have 3,090,991 shares issued, leaving only 242,342 shares unissued.
The key is the Nevada filings, why would you vote to increase the authorized from 1 billion to 3 billion, never file the legal change, than reduce from 1 billion to 3.333 million, which is a legal change.
Now the 10K, it looked to me that it was thrown together at the eleventh hour. Look at just one issue I found, page twenty.
Item 12. Security ownership of certain beneficial owners and management and related stockholder matters.
Look at the totals for all directors and officers as group 571,134,339 shares representing 44.64%.
When you add up the percent of ownership that number appears right, now add up the number of shares owned and that number is 671,134,339, or 100 million more than the 571 number. Looks to me Jill’s numbers are screwed up. There are numerous issues with the filing in my option, and it looks like it was just thrown together as if it didn’t matter.
Ok, now we have only 3.33 million shares authorized, KR could sell off the remaining 242,342 shares to raise more money, but based on the Nevada filing that is all he can sell legally.
For KR to sell more shares he will have to once again raise the authorized from 3.333 million to some higher number. What senses does it make to go from 1 billion, to 3 billion (which was never filed with Nevada) down to 3.333 million, if you intend to authorize more shares and sell more to investors?
The sense to me, is how I have described what’s happening, the third step is the merger, what is new to me now is how KR will convert is preferred, with only 3.33 million authorized and 3.09 million issued doesn’t leave much for his conversion so there will be some twist for him in the deal to cover his preferred position. My guess his 500K investment will be paid in stock of the merged company.
Glad to see the Ultrasonic Mitigation Technology disclosure in the 10K, page F-27. Thought this might kill the deal if it wasn’t disclosed. I bet the folks holding shares of Oiltek aren’t happy.
One important thing to remember; if everything goes to hell in a hand basket, there is Nevada Statues, title 7, and chapter 78.
From the stock price, looks like a little panic in the street, I purchased more today.
AI
