One for ten...... then, if the price drops by a factor of ten, or more, you can just increase the AS and continue to issue equity for debt. It's a tested and true formula.
Our board of directors has declared, and our stockholders have approved, a 1-for-10 reverse split of our Common Stock, to be effective as of the close of business on May 25, 2011 (the “Effective Date”). The reverse split will be accomplished by amending our articles of incorporation on the Effective Date to reclassify our existing shares of Common Stock (“Old Common Stock”) as follows: Each ten shares of Old Common Stock outstanding immediately before the Effective Date, and each ten shares of Old Common Stock issuable pursuant to an instrument exercisable for shares of Old Common Stock, shall, on the Effective Date, be reclassified and converted into, and become a right to receive, and the holders of the outstanding Old Common Stock or instruments exercisable for such Old Common Stock shall be entitled to receive therefor, one share of Common Stock.
Company stockholders do not need to surrender their stock certificates on the Effective Date, as the reverse split will be immediately reflected on the Effective Date on the stock books and records of the Company. However, when physical certificates representing shares are actually surrendered to the transfer agent for exchange, the new certificates issued in exchange therefor will be adjusted for the reverse split.
The reverse split will be deemed to be a tax-free recapitalization to the Company and its stockholders to the extent that outstanding shares of Common Stock are exchanged for a reduced number of shares of Common Stock. Therefore, neither the Company nor its stockholders will recognize any gain or loss for federal income tax purposes as a result thereof.
I am only expressing my personal opinions or repeating public information from SEC filings or media outlets-which may or may not be correct. Do your own investigating before investing!
