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Dividends were earned and paid, that the Preferred Stock and Com-
mon Stock shared equally in any further earnings or distribution.
5.
Advantages to Preferred
The Preferred Stockholders, through the eallable and liquidation
provisions of the stock certificates, and the accumulation of un-
paid dividends, have a claim for en amount greater then the total
assets of the Corporation.
It might be claimed that anything short of the maximum distribution
which could be made to the Proferred holders would be unsatiafactory,
However, the Corporation has weathered constant expensive litigation
during the past twelve years and has also weathered greatly reduced
business during the past six years - but has maintained its position
in the field, and is equipped at present to handle any increased
business which seems to be indicated by the general business trend.
A re-organization plan, thereforo, which will allow a sufficient amount
of capital to take care of any reasonable bisiness expansion would
peem desirable from the Proferred Stockholders standpoint.
The plan gives a certain amount of cash por share. This amount is
no doubt greater than the majority of the Stockholders would be glad
to accept as an outright purchase for their stock.
The plan also contemplates the giving of Debenture Bonds or Preferred
Stock in an amount approximately totaling the entire assets of the
re-orgenized Corporation.
It also increases the Preferred holders' percentage of Common Stock,
which may or may not have value, depending on the outcome of the
Corporation's operations.
The plan also cives the present Proferred holders first oall on eny
earnings up to say $10,000. per year, end then a substential majority
of all additional earnings which may accrus to the Common Stoch.
At present, the Preferred holders own approximately 0,000 of the
15,000 shares of Common Stock outstanding - or This percentage
will increase as more stock is given as bonus under the re-organiaction
plan.
Any disadventages to the Proferred holders would be on account of per-
mitting the present Common Stock to participate in the plan - or pos-
sibly by not making a larger cash distribution at this time.
So fax as the Common holders ara concerned, eny consideration which
they may be given will be en advantage.
6.
Plans of Ro-Organisation:
a.
You will find attached 4 Proforma Balance Sheets, based on our
May 3lst Balance Sheet. Two of these are prepared on the basis
of paying $200,000. cash to our present Stockholders, and two are
prepared on the basis of paying $150,000. cash. Sheets marked #1
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"ocrText": "Page -3-\nDividends were earned and paid, that the Preferred Stock and Com-\nmon Stock shared equally in any further earnings or distribution.\n5.\nAdvantages to Preferred\nThe Preferred Stockholders, through the eallable and liquidation\nprovisions of the stock certificates, and the accumulation of un-\npaid dividends, have a claim for en amount greater then the total\nassets of the Corporation.\nIt might be claimed that anything short of the maximum distribution\nwhich could be made to the Proferred holders would be unsatiafactory,\nHowever, the Corporation has weathered constant expensive litigation\nduring the past twelve years and has also weathered greatly reduced\nbusiness during the past six years - but has maintained its position\nin the field, and is equipped at present to handle any increased\nbusiness which seems to be indicated by the general business trend.\nA re-organization plan, thereforo, which will allow a sufficient amount\nof capital to take care of any reasonable bisiness expansion would\npeem desirable from the Proferred Stockholders standpoint.\nThe plan gives a certain amount of cash por share. This amount is\nno doubt greater than the majority of the Stockholders would be glad\nto accept as an outright purchase for their stock.\nThe plan also contemplates the giving of Debenture Bonds or Preferred\nStock in an amount approximately totaling the entire assets of the\nre-orgenized Corporation.\nIt also increases the Preferred holders' percentage of Common Stock,\nwhich may or may not have value, depending on the outcome of the\nCorporation's operations.\nThe plan also cives the present Proferred holders first oall on eny\nearnings up to say $10,000. per year, end then a substential majority\nof all additional earnings which may accrus to the Common Stoch.\nAt present, the Preferred holders own approximately 0,000 of the\n15,000 shares of Common Stock outstanding - or This percentage\nwill increase as more stock is given as bonus under the re-organiaction\nplan.\nAny disadventages to the Proferred holders would be on account of per-\nmitting the present Common Stock to participate in the plan - or pos-\nsibly by not making a larger cash distribution at this time.\nSo fax as the Common holders ara concerned, eny consideration which\nthey may be given will be en advantage.\n6.\nPlans of Ro-Organisation:\na.\nYou will find attached 4 Proforma Balance Sheets, based on our\nMay 3lst Balance Sheet. Two of these are prepared on the basis\nof paying $200,000. cash to our present Stockholders, and two are\nprepared on the basis of paying $150,000. cash. Sheets marked #1"
}