Effect of the Reverse Split on Convertible Securities
Proportionate adjustments will be made based on the ratio of the Reverse Split to the number of shares our common stock issuable upon the conversion of all outstanding convertible securities entitling the holders to convert into shares of our common stock.
The Preferred shares were issued for the purpose they were designed - to ensure insiders maintain control of the company in the light of the potential dilution from toxic debt. Furthermore, it makes RXSF far more attractive to an institutional investor if they can demonstrate a capital structure where the majority of holders are and will remain non-toxic and will NOT be sellers.
See you think you have lost out whereas in fact RXSF management has made the company stronger. There is no intention for any of the Preferred holders to convert and sell any of their shares, all insiders are subject to reporting requirements and this provides transparency to the shareholder community as a whole.
What you fail to realize is that any new institutional investors coming in will insist that the insiders waive some or all of their rights under the Preferred shares in order for them to invest. This is simply a proven strategy to make the cap structure more attractive to the more sophisticated investor community.
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