Sigma Labs Inc (SASI)

[TedJ]

"Believe warrants are still 1 for 1 and strike price is now $40."

If the warrants are going to be 1 for 1 at $40, then they must reduce the number of warrants. There were 1,410,000 warrants issued, so if they don't reduce the number of warrants by a factor of 10, then the current outstanding shares of 1,450,000 would be potentially increased to 2,860,000 shares (more than the 2,250,000 authorized shares), if the 1,410,000 warrants get exercised at 1 to 1.

The warrants should only increase the outstanding by about 10%, as they would have before the split.

The reality is that one warrant (CUSIP 826598112) could/can be exercised for $4 and the warrant holder would receive 1 common share of the old CUSIP 826598302 shares.

When they reverse split the old shares 1 for 10 (1 new CUSIP 826598500 share for 10 of the old CUSIP 826598302 shares), then the "value" of the 1 old shares became 0.1 of a new share.

So to get one new share, 10 warrants would have to be exercised at the old exercise price of $4 each.

This effectively increases the exercise price to $40 for one new share and decreases the number of new shares that could be issued to 141,000.

This would explain why the warrant price did not drop from 32 cents to 3.2 cents during Friday's trading session.

The company did not announce and implement a 1 for 10 split of the warrants with a new warrant CUSIP along with the common share split. They could in the future, but to me it would just be a unnecessary effort and expense.

All that would need to happen in the future is that the company's transfer agent would simply issue one share of common stock for every ten warrants that get exercised. You can't exercise the warrants without going through the transfer agent, that is one of their jobs.