Collin Texas Proposal to Amend Certificate of Incorporation to Authorize a Preferred Stock The Collin Texas Proposal to amend the certificate of incorporation aims to authorize the issuance of preferred stocks for the company. This proposal signifies a significant change in the company's capital structure, allowing for the introduction of a new class of shares that hold certain preferential rights and privileges. Preferred stock is a type of equity security that sits between common stock and bonds. Unlike common stock, preferred stockholders have a priority claim on the company's assets and earnings in the event of liquidation or bankruptcy. They are entitled to receive a fixed dividend payment before any dividends are distributed to common stockholders. Should the company face financial distress, preferred stockholders have a greater chance of recouping their investments compared to common stockholders. There are different types of preferred stock that may be considered under the Collin Texas Proposal. These variations address specific preferences and rights, providing flexibility to accommodate the diverse needs and objectives of the company and its investors. The following are some common types of preferred stock: 1. Cumulative Preferred Stock: This type of preferred stock guarantees that if the company fails to pay dividends in any given year, those dividends will accumulate and must be paid to preferred shareholders in the future, even before any dividends are paid to common stockholders. 2. Convertible Preferred Stock: Convertible preferred stock provides the option for shareholders to convert their preferred shares into a predetermined number of common shares at a specified conversion ratio. This feature allows investors to benefit from potential future increases in the company's stock price. 3. Participating Preferred Stock: Participating preferred stock enables investors to receive additional dividends beyond the fixed dividend rate if the company achieves certain financial milestones or targets. 4. Non-Cumulative Preferred Stock: This type of preferred stock does not accumulate unpaid dividends. If the company fails to pay dividends in any given year, preferred shareholders do not have the right to claim those unpaid dividends in the future. By amending the certificate of incorporation to authorize preferred stock, the Collin Texas Proposal provides the company with greater financial flexibility. The issuance of preferred stock allows for the attraction of new investors who are seeking more stable returns and lower volatility compared to common stock. Furthermore, the introduction of preferred stock can enhance the company's ability to raise capital, expand operations, undertake strategic initiatives, or reduce existing debt. In summary, the Collin Texas Proposal to amend the certificate of incorporation to authorize a preferred stock paves the way for the company to diversify its capital structure and attract a wider range of investors. The proposed types of preferred stock, such as cumulative, convertible, participating, and non-cumulative, offer various levels of benefits to the investors while reinforcing the company's financial stability and growth potential.