Just read that again and it made more sense to me. To me it will help justify an R/S which I think the company will have to do and if you have millions of shares that get reduced to minimal shares this will help knowing that you will have 100,000 shares per million that you had prior to the R/S. Yes it would have been nice to get a "coined" dividend but if they R/S at 100 - 1 would your shares be worth the amount of the dividend? To me this is showing a little confidence from the company of the direction of where the company is headed and helping the current shareholders (who have been here and stayed here) for the future.
For instance:
100,000 may not seem like a lot but if you have 10,000,000 shares as of Jan 16, 2015 and they R/S @ 100-1(Could be 150-1) your share count would be @ 100,000 shares. Now if you account for the "preferred shares" that you will receive your share count will now be @ 300,000 (200,000 that you will be able to sell off Feb 16, 2016.) You could be mad as all hell and sell your 100,000 to sell off whatever after the R/S and you would still have 200,000 shares for free to be able to sell off 1 year later after the company corrects itself.
If they did not do this then you would be left with 100,000 shares or less with nothing in the bank but your shares left over after the R/S.
Seems a little easier on the mind and understanding when i look at it like that. To me this just means that they plan on an R/S and they are trying to give back some shares to their current shareholders. Taking care of their shareholders IMO.
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