Ok I understand ... Here is the SEC filings...
The Company issued and caused to be delivered to the Shareholders, immediately subsequent to the Closing Date, 70,000 shares of its previously authorized Series B Preferred Stock (Series B Preferred Stock). The Series B Preferred Stock consists of 149,259 shares, with each outstanding share (i) to be automatically converted into 150 shares of Common Stock on October 1, 1998, or sooner at the election of the holder, (ii) being entitled to 150 votes on each matter submitted to the shareholders of the Company, with certain super majority provisions being applicable in certain instances, (iii) not being entitled to a liquidation preference, (iv) not being redeemable and (v) not being entitled to dividends. This series has certain non dilution provisions applicable to it in the event of stock dividends, stock splits and other extraordinary corporate events. The Series B Preferred Stock is considered a common share equivalent and, therefore, the Company is considered for purposes of applicable securities laws to now have an additional 10,500,000 common shares outstanding under this series of preferred stock.
Now tih that little tid bit here is another section...
No Transfers in Violation of the 1933 Act
5.03 Each shareholder of the Acquired Corporation covenants and represents that none of the shares of Midland Stock that will be issued to the shareholder pursuant to this Agreement, will be offered, sold, assigned, pledged, transferred, or otherwise disposed of except after full compliance with all of the applicable provisions of the 1933 Act and the rules and regulations of the Securities and Exchange Commission under the 1933 Act. Therefore, each shareholder agrees not to sell or otherwise dispose of any of the shares of the Purchaser's Stock received pursuant to this Agreement unless the shareholder: (a) has delivered to the Purchaser a written legal opinion in form and substance satisfactory to counsel for the Purchaser to the effect that the disposition is permissible under the terms of the 1933 Act and regulations interpreting the 1933 Act; (b) has complied with the registration and prospectus requirements of the 1933 Act relating to such a disposition; or (c) has presented the Purchaser satisfactory evidence that such a disposition is exempt from registration under Section 4(1) of the 1933 Act. The Purchaser shall place a stop transfer order against transfer of the shares until one of the conditions set forth in this subparagraph has been met.
Investment Legend on Certificate
5.04 Each shareholder of the Acquired Corporation agrees that the certificates evidencing the shares the shareholder will receive under this Agreement will contain substantially the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN TAKEN FOR INVESTMENT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS A REGISTRATION STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, IS IN EFFECT FOR THE SECURITIES, OR ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS IN FACT APPLICABLE TO SUCH OFFER OR SALE.
Again I know the B can be just converted but they still have to file in accordance with the SEC rules and it takes a board decision and resolution then a registration then all proper time restricitons. Plus they have to comply with the over 20% holding rule also. I shall endeavor to search the SEC rules and regulations for this little tid bit.
Just because someone states they can do something they do have laws to contend with.
Hope this helps. Plus understand if they do convert the B series LOL they are going to loose a percentage of the company ... That means someone could actually step up and buy their way into this company.
I am a major shareholder now because of the P and common I hold which in a fully diluted form I have a 1% voting right just myself.
The P holders united have about a 30% voting right. (which from the looks of it if people are telling me the truth 30 online investors carry a major voting right.
I am not flaming you but I have a major amount of investment here over the past 9 months. So I have educated myself and most of all I use common sense. That 20% rule by an insider is a very important part of this trilogy. I shal try to find it.
Hope this helps.
GB |
