Interesting questions from Pre14C SEC Filing.
Near the top of the document, there is this:
2) Aggregate number of securities to which transaction applies:
909,572,728 shares of Common Stock as of June 18, 2007
Further down in the document re: the R/S, there is this:
As of June 18, 2006, there are 637,811,446 shares of common stock issued and outstanding. The immediate effect of the Reverse Split will be to reduce the number of presently issued and outstanding shares of Common Stock from approximately 637,811,446 to approximately up to 91,115,920, thus leaving 908,884,080 shares available for issuance following the Reverse Split. We have no plans, proposals, or arrangements, written or otherwise, at this time to issue any of the additional authorized shares at his time.
First off, it's amazing at the gaffes these guys make in their SEC Filings. Does anyone proofread them? Apparently not. Look at the year ... 2006. LOL! So if there are 909,572,728 shares of stock out there, how is the R/S only affecting 637,811,466? That's a difference of 271,761,262. The "insiders" (Walther, Rutkowski, Rossman, Schwanitz) own 332,166,250. Could it have something to do with this blurb at the top of the Filing:
(4) The amendment to the Articles of Incorporation to increase the authorized shares of common stock to 1,000,000,000, par value $.00001 and establish a class of preferred shares, totaling 1,000,000,000, par value $.00001, was ratified;
Is it possible that the majority of Walther's, Rutkowski's, Rossman's and Schwanitz's shares are going into the PREFERRED class? That could explain the majority of the difference in what is currently outstanding (909M) and what is being split (637M). If those guys shares are going to PREFERRED status, are they being reduced 1:7 like the rest of the common or will they retain all their shares as preferred?
Preferred Stock
Our board of directors will have the authority, without further action by the shareholders, to issue such shares of preferred stock in one or more series and to fix the rights, preferences and the number of shares constituting any series or the designation of such series. The issuance of preferred stock may have the effect of delaying or preventing a change in control or make removal of our management more difficult. Additionally, the issuance of preferred stock may have the effect of decreasing the market price of the common stock and may adversely affect the voting and other rights of the holders of common stock.
As people will recall, the sentence I put in bold in the above paragraph was the excuse management recently used to grant Walther, Rutkowski, Rossman, and Schwanitz 235M shares of stock that took the O/S over the 900M mark and effectively forced them into this R/S because they are running out of stock to issue. They will continue to issue stock until they actually generate revenue from all this LACC work they claim to have coming in.
It will be very interesting to see what happens with this. I expect more dilution near term, unless Marc actually delivers on his claim that LACC revenues will happen before the next fiscal quarter ends (August). Of course, every claim Walther has made in the last four years has not panned out when he said it would, so why should anyone believe this one will?!?!?! The funniest thing may be if management actually believes anyone will believe the following from the Filing:
We have no plans, proposals, or arrangements, written or otherwise, at this time to issue any of the additional authorized shares at his time.
You may want to bet your last $ that an S8 will be out in a couple of months, and they've covered their arse with the "at this time". |
