Replies to post #21774 on Cann American Corp (CNNA)

[brandon17617]

I’ve read the filings, I know what the filings mean. I’d be happy to explain the filings, and the legitimate way to interpret them in a PM from anyone that has questions. $CNNA long #tiredofbashers

[Diego Delgado]

unvctrader9m, I wanted to do a bit more digging into the 2mm preferred shares that you keep bringing up. So I decided to email CEO Black and get an explanation as to what was going on with those.

Here is what I sent:

4/16/2020

CEO Black,

In the most recent filing, there appears to be 2mm shares of preferred stock issued. Would you be able to expound on this? From my trading experience, I believe these are not traded shares. Any explanation would be greatly appreciated! P.s, keep up the good work! Thanks for the twitter sneak peak!

~RDG~

Sent from my iPhone

Here is the response that I received this afternoon:

Yes, I have all the A and B preferreds. The classes were created by previous management. You can see in any of the filings' disclosure statements where they, (Dahlerup and Schiorring) cancelled (returned) them to the company.
They were issued to me in consideration of the acquisition of Cann American LLC. All issuances have to be in consideration of something of value, be it cash or an asset etc. In this case rather than the company owing me $200k for the Cann American LLC purchase, I took the preferred shares instead so that I could extinguish the $200k debt.
Having the preferred shares allows me to effect corporate actions without having to seek the approval of all the shareholders and send out letters for a vote. For instance, the name change to Cann American Corp required a majority of shareholders approval. Rather than soliciting a vote from every shareholder, the preferred formula gives me the majority of votes and I can approve the action internally.
That's essentially all the preferreds do. Make me the majority shareholder vote. They'll never be converted to common as I would not want to diminish my majority control. It's never a good idea if the CEO does not have the preferred control block. It means someone else is really in control. This was the issue I had with IGEX. Although, I was always just there as an interim, originally with the intent of helping Hulogix merge in as they had no experience getting a company current etc. I never had full control because Tom Shea was the majority shareholder. He had the preferreds and could override me if he wanted. That wouldn't have been an issue because he originally agreed to suspend his voting until Hulogix was able to buy them from him. But because Hulogix wanted to try and be sneaky, create a new class of preferreds and screw him on the deal, that suspension was lifted and he was able to remove them by majority shareholder vote.
None the less, whoever has all or most of the preferreds is really in control. In the case of CNNA I will always hold every preferred share so that nobody can meddle with the company or override me. Unlike the other companies that I tried to help out, get current and bring in a permanent CEO like IGEX or in the case of KYNC to help the CEO reorganize and purge old directors, I never had full control. With CNNA I will always have full and sole control via having all the preferreds. Hence the reason there are no BS issues there. There's only one hand in the kitchen at CNNA. Me.
Hope that helps clarify.
Jason

I hope this helps with clarifying your questions as it did mine.

~RDG~

[DD_dempsey]

Actually-that is the very definition of reduced $CNNA

My friend, when you stated to another respondent here:

Read the filing carefully
There’s no such thing reducing. He basically cancelled commons and issued preferred shares 2m which gives g
Him more power. Did you ever read the filing

Frankly- that is the very definition of reducing and quite rare in this day and age at the micro level of the OTC.

Aside - For those that reached out- I truly appreciate as life obviously
Hit home and the realities of world events specifically
Hit hard to my community and family. Luckily - we have all persevered. There is far more to do and far more important things than arguing over semantics and this nonsense.

I do hope you’re well bud. It’s been some time and I look forward to chatting again soon