To answer your question, the outstanding warrants and options put them near or over the 400,000 limit. They need room for the $10 million financing deal and employee incentive program.

The concern for me is with the current wording. Failure to lower authorized shares when a R/S occurs is bad. The company then has hundreds of thousands of shares at their disposal to get additional financing (a good thing) or issue huge options to management and dilute our holdings significant (very bad thing). I'll be voting no to a R/S without changes to the wording that cause a reduction in authorized shares. By increasing the limit to 600,000 and then reducing by the same ratio as the R/S, they have the same proportion (equivalent 200,000) of new shares available for financing and option awards. Beyond that 600,000, they should start a buyback strategy within a year or so of commercial success. The buyback can be used to support employee incentive programs. They should eventually be able to get credit from a bank or other financial institution to finance further expansions.