The Controlling Block Preferred Share
In the annals of my penny days I've thought to myself many times... What's the point of a control block share? What does timing have to do with it?
To dilute? You can do that with common shares. Increasing the A/S etc etc.
To avoid hostile takeover? Absolutely. In order to determine the true reason though, we have to analyze context.
Current Information, Recent appointments to BoD, Big time investors coming in with average price higher than the day of agreement...
The obvious point is to avoid hostile takeover.
What about Convertible debt? There is none.
So we want to avoid hostile takeover... why?
Unique, proprietary technology or service in which another individual or company could directly benefit from the takeover of TLFX. In order for this to happen, this entity needs to occupy at least half the shares. Therefore I can presume that internally TLFX believes the per share value of their company to obviously be higher than it is today... but even higher than the amount of purchasing it'd take to occupy at least half of the shares... If management wanted to get out, they'd welcome the opportunity at a hostile takeover, it means there'd be a huge uptick in volume, liquidity and share price for them to sell shares.
Therefore, the perceived value of TLFX shares, internally to Telefix, is correlated to the amount of time and money it'd take to accumulate 50% of shares.
Long story short? The Controlling Block preferred share is yet another key insight into how valuable TLFX believes its' company is. The timing tells us everything... testing with a major company? If I perceived value of the product, and I knew I could buy up half the shares for let's say... $500,000... why the heck wouldn't I do it? Especially if I nailed the benefits of said technology at much larger than $500k? A Dirty move... sure, but a smart one nonetheless.
Telefix is protecting themselves from not only their competitors... but their own customers. One must imagine that anyone at said company that is testing product would be privvy to this penny stock and its' technology. What may seem to be inexplicable upticks in volume may actually be the handful of people who have access to test information and want to make themselves wealthy.
Just a theory... but as I've always said - if you find the motivation you find the answer.
