Shareholder's Meeting to vote on R/S on Oct 31. Since IGTN is a local company to me, I will attend, and will place my votes 100% FOR the R/S:
Press Release Source: Ingen Technologies, Inc.
Ingen Technologies, Inc. Releases President's Letter to Investors
Wednesday October 12, 7:15 am ET
CALIMESA, Calif., Oct. 12 /PRNewswire-FirstCall/ -- Ingen Technologies, Inc. (OTC: IGTN - News), a medical device manufacturer of OxyAlert(TM), OxyView(TM), Secure Balance(TM), and Pure Produce(TM), announces the release of the President's Letter To Investors.
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Dear Shareholders and Members of the Investment Community:
As Chairman / CEO and founder of Ingen Technologies, Inc. ("Ingen" or the "Company"), it is important to have this opportunity to communicate with you, as several events have made it timely to do so.
In regards to the 40-1 Reverse Stock Split That Has Been Proposed By the Board: The Board of Directors ("Board") of Ingen recently voted unanimously to recommend to shareholders a 40-1 reverse stock split of its outstanding common shares. This would decrease the number of outstanding common shares from approximately 490,000,000 shares now to about 12,250,000. The Board also voted to decrease the number of authorized common shares from 500,000,000 presently to 100,000,000.
In addition, the Board (and our two preferred shareholders) has approved a resolution (contingent upon shareholder approval of the above actions with respect to the common shares) that modifies the rights and conditions of our preferred shares as well. This resolution provides that all preferred shares are convertible into common shares. It mandates a 3-1 reverse split of the preferred shares; from just under 40,000,000 issued preferred shares to approximately 13,333,000 issued preferred shares. It reduces the current convertability feature from one preferred share to ten common shares to a one-for-one ratio. It allows for one vote per share instead of 15 votes per share. The number of authorized convertible preferred shares remains at 40,000,000.
The Board's rationale is sound and was based on the following facts and considerations. During the last half of our 5/31/05 fiscal year, it became necessary to raise capital from external sources to provide the liquidity required to fund the costs to develop OxyView(TM) and OxyAlert(TM) until our new products start contributing cash flow in 2006 (calendar). We elected to sell stock to procure these funds, rather than issue debt, because it was less difficult to do and it avoided burdening our balance sheet. The accompanying consequence was to increase our common shares outstanding very substantially, which caused dilution to our earliest shareholders and contributed to a reduction in our share price.
Nonetheless, both the Board and I believe the implicit trade-off was necessary and that it will prove to have highly constructive long-term results for our shareholders for several reasons.
* The 40-1 reverse stock-split of our common shares changes our capital
structure which does not affect the operational fundamentals of the
Company, nor does it decrease in any way the proportionate ownership
percentage of each common shareholders investment. The proposed
changes in our preferred share structure is reflective of the Board's
desire to maintain fairness and a reasonable capital structure for the
benefit of all our shareholders as we continue to grow our business by
attempting to attract additional capital investment and increase our
sales and available product lines.
* When a stock's share price dips to very low levels (in absolute
terms), as ours has recently done, it is typical for investors to
anticipate that a reverse stock split might be forthcoming. This
discounting process by the stock market usually causes a decrease in
the price of the shares and may be beyond the power of management's to
counter. This process appears to have already happened to some extent
in the case of Ingen's share price.
* The 40-1 reverse common stock split (which we expect to be approved)
should raise our share price to a much higher absolute level than it
has recently been trading; perhaps by as much as 40 times. It is
essential to have a higher per share price in order to be able to
obtain future financing from professional providers of funds and
institutional investors. This is an avenue that is seldom available
when a corporation's shares are selling for pennies (literally).
Further, the equity "cushion" that we have obtained could also become
the basis for subsequent issuance of debt -- which typically has the
lowest cost of capital.
* The resulting anticipated higher absolute stock price level should
reduce some of the extreme price volatility (as measured in percentage
terms) that our shares have experienced, especially recently when they
have been selling below $0.05 per share.
In short, we feel strongly that Ingen's decision to sell equity in FY2005, even though it made a subsequent reverse stock split virtually necessary, was a wise and constructive strategic choice for the Company. Our shareholders will be required to vote on the proposed 40-1 reverse stock split and we expect them to collectively affirm this step because of its overwhelming merit.
Special Shareholders' Meeting to Vote on 40-1 Reverse Proposal, et al
Date: Monday, October 31, 2005 Telephone: (909) 790-7180
Hour: 9:00 AM (Pacific Time)
Place: Ingen Technologies, Inc. Office
35193 Avenue A -- Suite C
Yucaipa, CA 92399
By law, given our particular circumstances, shareholders must vote to approve the Board's reverse stock split proposal and reduction in authorized common shares. Assuming approval, the reverse stock split and authorized share reduction and its effect on the share capitalization will become effective on the date of the vote.
Shareholders are cordially invited to attend this Special Shareholders' Meeting where they can vote, meet management, and ask questions.
Initial Discussions with Prospective Investment Bankers Are Encouraging
In order to fully fund our expanding product line, and its expected strong revenue growth over time, additional external capital will be required. We have had discussions with some prospective investment bankers. Although the Company does not yet have any firm financing commitment at this time, we are encouraged by their initial reactions and degree of interest, both of which are conditional upon the 40-1 reverse split, et al, occurring.
Production Scheduled For Two New Products in 1Q2006.
Ingen's core corporate competency is the marketing of sophisticated bio-medical equipment to niche markets. Therefore, it is of great importance to note that Ingen's two new products -- OxyView(TM) and OxyAlert(TM) -- are scheduled to go into production, by second parties, in early 2006 (calendar). This is a major forthcoming event for Ingen, as it should contribute to a significant increase in revenues and help to create a positive cash flow and increased share value.
It is my opinion that Ingen is on the cusp of posting positive and accelerating financial results, eventually leading to attractive gains in shareholder value. To those of you who are already shareholders, I want to thank you for the confidence you have expressed in the Company's outlook, and in me, by investing in Ingen shares. To those of you who are prospective investors, I encourage you to consider investing in our shares. I like to think that Ingen is a promising microcap company whose best days lie ahead. I look forward to the challenge of leading Ingen to capitalize on its appealing opportunities, fed by an aging and increasing population and serviced by our technologically advanced products, which have competitively attractive features.
Finally, our Investor relations program and resources have expanded so we encourage you to contact us at the number listed below to learn more about Ingen and to stay abreast of Ingen's developments.
Respectfully,
Scott R. Sand
Chairman / CEO
Ingen Technologies, Inc.
About Ingen Technologies, Inc.
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