The Company’s market cap is $81.8 Million USD despite having two classes of preferred that really could cut into the common shareholder’s equity stake should the Company choose to do so at any time. You got to love the Series B if you are a holder of Series B:
Series B Preferred Stock
The following is a summary of the material rights and restrictions associated with our Series B Preferred Stock. Each share of Series B Preferred Stock is (i) convertible, at the option of the holder, on a 1-for-5.384325537 basis, into shares of common stock (subject to stock dividends, stock splits and the like) of the Company, (ii) automatically converts into shares common stock immediately prior to a merger, sale of assets, share exchange, or other reorganization, and (iii) has voting rights equal to 100 shares of common stock (subject to stock dividends, stock split and the like).
Reading the above, while they are convertible at one Series B share for 5.384325537 shares of common stock, the part that really jumps out at me is the voting right associated with Series B. Did you see that each Series B share has the voting rights of 100 shares of common stock? And that right exists without ever converting it to common stock as I read this filing.
And this stock is trading at $0.51 cents? Amazing. Is it worth $0.51? I could never justify putting that much money in a share when the Series A and B are out there. Sure for a short time play, buy it and try for a quick profit. However, if you are buying shares to put them aside for a couple of years – or (God forbid) your retirement, you very well might find out what happens when that Series B comes back to haunt you. But then there is always a chance this might take off, go to $150 per share and be the best decision of your life. I would look so foolish if that happens. I guess that is the risk of my limited 11 years plus in the smallcap stock industry.