The preferred shares and their usage are to be spelled out in the new Articles of Incorporation in Delaware. I considered the following. It is one of many reasons for my concern over the issuance. If we are not able to see in writing in advance, it will be voted in and then we will be able to read it and that is never a good thing.
"Occasionally companies use preferred shares as means of preventing hostile takeovers, creating preferred shares with a poison pill (or forced-exchange or conversion features) which are exercised upon a change in control. Some corporations contain provisions in their charters authorizing the issuance of preferred stock whose terms and conditions may be determined by the board of directors when issued. These "blank checks" are often used as a takeover defense; they may be assigned very high liquidation value (which must be redeemed in the event of a change of control), or may have great super-voting powers."
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