VG Life Sciences Inc. (VGLS)

[jurisper]

Haig and his brother Arthur still control the board - two out of three votes. Haig also seems to retain his old level of control over the pref shares - recalling that the prefs are guaranteed 50.05% of any shareholder vote, and therefore have control of the company.

It's a puzzle why Medbridge wouldn't have demanded changes to these things before investing. Maybe there are side agreements in place; maybe they're pretty comfortable with each other. Without some credible independents on the board and much better disclosure, I wouldn't feel at all comfortable with the current arrangements if I were a shareholder.

The increase in authorized common from 60M to 150M was hinted at in the risks section of the last quarterly: Further, proving the efficacy of our products with regulatory agencies is daunting and expensive, and we could be compelled to increase the number of authorized shares in the future, perhaps near future, to make certain we can issue securities to fund the Company’s development.

There's at least 10.7M common on issue currently (8.7M as of 30th Sep and at least 2M issued to MB since then).

A big chunk of the increase would be necessary to cover the various conversion arrangements in place for existing liabilities. The company should disclose the fully-diluted position. Too much work to try to calculate, but as a rough bound: liabilities at the moment are probably around $7M, including the new MBV and DMBM promissory notes; if all of this were converted at the $0.0588 note conversion pricing, it would see issuance of about 120M new common.

A big unknown is what happens with the $862K T&T liability, now past due.