SK3 Group Inc. (SKTO)

[Thermoking]

Sterling posted this yesterday and it got lost in the static. Silver lining.
SmallCapsMarket, here's the “beauty” about this deal...

The beauty about this deal is that the company used Preferred Shares and "NOT" Common Shares to execute the transaction to acquire Medical Greens ™. The Preferred Shares were used as a "Poison Pill" type of technique to establish control of the company without diluting the ”actual” value of the company.

If there were any intentions by SKTO to dump shares, then they would have not issued Preferred Shares; they would have issued Common Shares. They had to increase the Authorized Shares (AS) simply to show that such an amount of shares could be captured from the company's Treasury of Shares within their AS for ”just in case” reasoning of ever having to convert the Preferred Shares into 51% of the Outstanding Shares (OS). So yes, they had to raise the AS, but not for the reasons you are insinuating.

Now, when they actually show a capture of Revenues to have ”Net Income” within their financials, an Earnings Per Share (EPS) will then be derived by still using its "unchanged" OS of 362,050,303 shares instead of using a much higher number. This means still "no dilution" in SKTO value and no dilution to its OS of which again is the Key Fundamental Denominator for assessing "Fundamental Valuation" of a company and not its AS.

It's a little tricky for understanding right now, but this was the most awesome way of doing this to keep the company's value intact!

The deal says that the Preferred Shares are…

convertible at any time ”after one year” from the date of issue into 51 percent of the resulting common stock outstanding.

This means that the shares can only be issued into Common Shares after 1 year goes by after being first converted from Preferred Shares into Common Shares. They will be restricted for 1 year. Since the shares are still in Preferred Shares status, there is absolutely no concerns and confirms what I had mentioned above. You are interpreting such incorrectly.