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amazingkarma

04/14/08 11:31 AM

#43045 RE: katrina2 #43042

Only if they file with the SEC. Unfortunately the company only needs to have a simple majority of shareholders to approve a new class of share and they can simply create it. Many don't realize that this can happen with any company, but in most cases the general public holds more than 50% of the shares in the company so it has to go to a vote, but on the pink sheets and OTC it tends to be the opposite so companies can simply do it unilaterally without input from the public.

When companies create more than one class, they tend to begin alphabetizing them, and believe it or not, I've seen an OTC stock with preferred share classes up to "R" all with different conversion rates. The classes and conversion rates can simply be made up with both parties agreeing to the details and they'll just start showing up on filings. With companies that do report, the only way to figure out the origination date is to find out where/when it's announced (rarely do large companies announce issuances) or keep searching back in filings until the preferred class no longer shows up.

Generally though that only narrows things down to a Q unless you get lucky and they reference the specific transaction in the filing and attach a specific date to it. There is no seperate filing required for the creation or distribution of preferred shares unless the conversion results in an ownership greater than 10% sharewise. That is why some preferred share $ conversions are locked to give a larger $ amount while restricting the number of shares, i.e. convertible to 1,000,000 shares at market is different than 1,000 shares convertible to $50,000 each.