Speaking of Reverse Splits... Did you know that if you factor in the Preferred B to Common conversion shares into the current market cap ($2 Million), the adjusted PPS is .000014?
Share Structure Now Share Price Now
Authorized Shares 1,500,000,000
Outstanding Shares 1,500,000,000 0.0013
Market Cap $1,950,000
Preferred B Share Conversion 12,000,000,000
Total OS Needed to satisfy B's 13,500,000,000
Adjusted PPS once you factor in conversion dilution = $0.00014
If the company proposes a 1 for 50 reverse split it will have the following impacts to the PPS and shares structure.
Share Structure Post Split
Authorized Shares 1,500,000,000
Outstanding Shares 30,000,000
Share Price Post Split $0.065
Post Split Market Capitalization $1,950,000
Preferred B Share Conversions 240,000,000
Total OS Needed to satisfy Pref B shares conversions = 270,000,000
So the low float of 30 million could quickly climb to 270 million just as it has in the past after reverse splits.
Adjusted PPS Post Split at same market capitalization of 1,950,000 = $0.0072
Now divide you current share holdings by 50 and multiply it times the adjusted PPS and see what your TDCP shares are really worth after the reverse split. It is not the reverse split that will hurt us, its the Preferred B Share Conversions that will have to be factored into the market capitalization.
Now I know the first thing that will get posted to debate this is they won't convert their shares right away, so there will be no dilution. Valid point, but we still have to factor in the Preferred B shares when we determine the value or market cap of the company.
Others may suggest further dilution will occur both pre and post split to fund operations, R&D, Salaries, etc. Remember, they don't expect to see any CHS revenues until late 2017! Grants can only be used to fund NDSU research, not pay executive salaries, rent, legal fees, auditing fees, and so on!
