Awesome post Renee :) I look forward to getting the details on this!
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A soliloquy on the A/S increase :
#1 ) The most negative implication for any company on the OTCBB and OTC to raise the A/S is for dilutive reasons , such as
non-recoverable operating expenses and management enrichment at the expense of shareholders . LTDI shareholders are under the impression that LTDI can meet all operating expenses with the revenues from selling boats so there appears to be no need to dilute for operating expenses . Also , from the impressions of C&O Hernandez by shareholders from this board who have visited the company and met the Hernandez's face to face and have observed the Hernandez's hands-on involvement in the company it does not seem likely that the Hernandez's would dilute shares to enrich themselves at shareholder expense .
#2 ) When any company on the NYSE , Nasdaq , Amex , OTCBB , or the OTC converts A/S to O/S for the purposes of GROWTH then the shares used are not dilutive to shareholder equity because there are FAIR VALUE assets acquired for every share used to buy those new assets . If LTDI were to purchase or lease a bigger building and more equipment to make more boats then any use of A/S would be GROWTH directed towards increased revenues .
#3 ) A/S can be used as a poison pill by ANY company to prevent a hostile take-over .
#4 ) Specific to LTDI the new A/S could theoretically be used to
give an acquirer a substantial portion or all of the A/S as a
lucrative inducement to pay a higher price for Latitude Industries . Permit me to use an example . If Latitude was worth $6 million under their current O/S share structure , including current contracts and including current asset value then the buyout price would be approximately .003 cents per share , based on 2 billion O/S ( float + restricted + escrowed shares ) .
Now , permit me to use an example of a $24 million buyout whereby the acquirer receives the estimated $6 million value of Latitude and 2 billion of the 3 billion A/S as restricted shares . It then increases the value of the current O/S shares to .012 cents and the acquirer receives the company PLUS 2 billion restricted shares that are also worth $24 million on paper . Essentially the exampled 2 billion restricted A/S gives them Latitude Industries for zero cost predicated on the new company enhancing business operations to warrant a sustained market cap valuation of $24 million and higher .
So , the recent increase in the A/S will be used for one of the above situations . It would be inconsistent with the Hernandez's
demonstrated sweat equity in their hands-on company to harm their personal investment in their stock , so it is my opinion that dilution for non-recoverable operating expenses or for personal enrichment at shareholders expense is the least likely of the scenarios presented in this post .
Renee
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