This is definitely a positive move. It also enhances mCig's (MCIG) 9% investment in the company. I've been predicting this since day one. Here's how the effect breaks down if we assume that the share price is adjusted by the market to the same Price Earnings (PE) ratio as before the restructuring.
Earnings Per Share (EPS) are calculated based on undiluted Outstanding Shares (OS). This action by OMHE has the impact of a reverse split without the negative of reducing the number of shares owned by common shareholders. Prior to today, OMHE was trading at around $.025/share. Assuming there are no additional earnings in 4FQ17, the net income through the first nine months of the fiscal year is $ 915,480
EPS = $915,480 net income / 975,828,741 shares (OS) = $.0009/share
PE = $.025/share / $.0009 EPS = 27.77 x
Old share price = 27.77 (PE) x $.0009 (EPS) = $.025/share
Now applying the previous PE to the new share structure...
EPS = $915,480 net income / 368,938,292 shares (new OS) = $.00248/share
New equivalent share price = 27.77 (PE) x $.00248/share = $.0688/share
In other words, assuming OMHE was trading at $.025/share before the restructuring, the equivalent value of common shares under the new share structure should be $.0688/share.
Again, this assumes that the net income does not increase in the 4th quarter. At $.03/ share under the old share structure OMHE should be trading at around $.08/share under the new structure.
Good time to pick up some shares before the market picks up on this. OMHE is currently trading at $.0269/share.
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