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Erica Frank

9 Sept 2013

Matty Groves, Inc.

To the tune of: Matty Groves, traditional ballad (one version available at

https://www.youtube.com/watch?v=1it7BP5PckI, but the full song is much longer).

For equity, for equity

The fiscal year to fund

The Matty Groves investment plan No longer could be shunned.

But how to grow the Matty Groves

And how to make it thrive?

To bring its value up from low,

And reach its peak so high?

The articles will authorizeThe different types of stock 0F

1 

And with a plan to publicize

Investors soon will flock.

The founders and their friends may have

Some common stock in sharesAnd some may vote and some may not 1F

2 

And that is just and fair.

Uncommon stock is called "preferred"

And it grants rights and clout:

Convert, redeem, and veto votesIn shares all parceled out.

1 Schneeman 421: Articles of incorporation specify the

types of stock authorized; if none are mentioned,common stock is considered the default.

2 Shneeman 421: Owners of common stock get one

vote per share; nonvoting common stock mayalso be issued.

Conversion rights allow a change:

Preferred to many common,

Redemption rights can force their payWithout resort to lawmen.2F

3 

The stock can carry voting rights

Of many varied types

Seats on the board, or extra votes,

Or veto of their dislikes.3F4 

Matty Groves had a CFOWho ne'er was caught asleep

He knew the tricks of the finance trade

A wiz at the spreadsheets.

He shoved the data right and left

And up and down the rowsHe counted all the assets up

And saw how they could grow.

If you would grow slow and sure

Common stock's your path.

Control each share, and have no care:Avoid all public wrath.

If you would grow more fast and bold,

Preferred stock is the way.

Draw investors in huge crowdsBy granting rights for pay.

3 Norton 1: Conversion rights avoid dilution by

allowing a preferred share to be exchanged formany common shares; redemption rights canforce repurchase, although this often has a timedelay requirement or is not available in earlyinvestment rounds.

4 Norton 1: Preferred stock can contain many kinds of

voting rights.

https://www.youtube.com/watch?v=1it7BP5PckIhttps://www.youtube.com/watch?v=1it7BP5PckIhttps://www.youtube.com/watch?v=1it7BP5PckI

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And if you would grow bigger still

Then public you could be

List all the actions of your tillFor anyone to see.

The SEC is long of armAnd writ with many rules;

If public you would be by choice,

I pray you, be not fools.

Matty Groves, Inc, had much to thinkAnd would consider all

And as they measured all the plans,

Their debtors came to call.

"Pay up, pay up," the debtors cried

"Pay up or head to court;

By cash or assets, no damn tricksWe won't take naked shorts."4F

5 

"We won't pay up; we can't pay up;

We've no cash for amends,

But if you'll take some shares of stockYou will get dividends."

5 "Naked Shorting" 1: Illegal sales of shares that may

not exist.

"I'll take that stock if it's preferred

With dissolution rights.

My future gains may be deferredBut they'll come back some night."

"And if this comp'ny goes to hellI shall be paid back first.

And if it grows so very well

Then I shall be no worse."

So Matty Groves distributedAnd the CFO, he swore

For all the work was his by bid;

He typed 'til he was sore.

He wrote up each certificate

 Named Matty Groves and the state,

Then wrote in the recipientAnd described the rights and rates 5F

6 

And then he brought them to the board

To be signed, two by two6F7 

To be released out in the worldTo their investors new.

Then Matty Groves the market joined

And loudly made the call

And issued stock as it had coined

For profit to them all.

6 Schneeman 431: Stock certificates must contain the

name of the issuer, the state of incorporation, thename of the issuee, the number and class ofshares and series label, if any.

7 Schneeman 432: Stock certificates must be signed

by two officers, often the president and secretary.

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Frank 3

Works Cited

"Definition of Naked Shorting." Investopedia. ValueClick Inc, 2013. Web. 4 Sep 2013.

 Norton, Eric. "Understanding the Difference Between Common Stock and Preferred Stock

Equity Financing for Startups." A Blog For Business Owners. Norton, Petersen &

Furumoto LLP , 11 Jul 2013. Web. 2 Sep 2013. .

Schneeman, Angela. The Law of Corporations and Other Business Organizations. Sixth Edition.

Clifton Park: Delmar, Cengage Learning, 2013. Print.