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Replies to post #88802 on Rocky Mountain High Brands Inc (RMHB)
05/18/18 9:59 AM
05/18/18 11:31 AM
05/18/18 11:38 AM
41. The increase of authorized common shares to 4 billion in October 2017, was even more
hazardous and ill-considered, and equally self-dealing. Nevada Revised Statutes Section
78.3791 requires any issuance of a controlling interest in a Nevada corporation be approved by
the affected shareholders on a class-by-class basis. No such approval was obtained from either
the Series A or the common shareholders prior to the Company’s issuance to Welch of a newly-
created class of preferred shares that provided him a controlling interest, albeit temporary,
sufficient to increase the number of authorized common shares from 950 million to 4 billion.
Any post-increase assertion that the Series E was somehow intended to “protect the interests of
the Company and its shareholders” (see, NRS 78.378(3)) is specious and groundless, especially
since it essentially created new rights for Welch, designed to usurp the democracy rights of the
other shareholders, rather than “granting or denying” rights or privileges to an existing holder.
By directing this hazardous and ill-considered transaction, the Defendants subjected the
Company to risk of damages and a negative impact on the market for all its shares in the event of
an issuance in excess of 950 million were deemed void, all for their own personal benefit, and
thus breached their duty of care and loyalty.
AI
