JB and ZJMY Holding Co (JBZY)

[Tengri]

What is the implication of the Reverse Split?

On Thursday this past week, a change was made to the state filing history of JBZY (see History section)

The latest filing announced (i) a Reverse Split of Common Shares; and (ii) No Split of Preferred Shares

JBZY has a total of 2 billion Authorized Shares, broken down in approximation...

- 850 million Outstanding (Common) Shares
- Preferred Shares convertible into 1.15 billion Outstanding (Common) Shares

So let's look at the implication of the filing on the share structure of the stock...

(i) Reverse Split of Common Share

a 100:1 stock split = 1 million shares splits into 10,000 shares
Outstanding Shares of 850 million will split into 8.5 million OS
At today's $16M market cap, stock price goes 0.019 to $1.9

This split gets JBZY closer to its goal of meeting requirements to uplist to NASDAQ..

Outstanding Shares = min 1.25 million (Check - JBZY will have 8.5 million post-split)
Public Shareholders = min 450 shareholders (Check - JBZY had 4000 in last filing)
Stock Price = min $4.00 (JBZY will be much closer to this price after Reverse Split)
Market Cap = min $45 million (JBZY will breeze past this value with a sniff of news)

(ii) No Split of Preferred Shares

After the Reverse Split of Common Shares, JBZY will have the option to convert them into 1.15 billion Outstanding (Common) Shares

Worst Case scenario... If Preferred Shares were all to be converted, the reverse split share count of 8.5 million Common Shares (i.e. all of those 4000 shareholders!) would be diluted by 99%+ , and thus discount the return potential on their investment by a factor of 10x - i.e. if one expected to make 100x ROI, one would now expect a 10x ROI

Best Case scenario... If Preferred Shares were never to be converted, the reverse split share count of 8.5 million Common Shares would go through the roof once the merger of assets is complete and officially release - i.e. if JBZY reached a market cap of only $1 billion divided by post-split Common Shares of 8.5 million = $117 stock price

Base Case scenario... Preferred Shares will not be significantly converted right away, to the extent that it would limit the post-split stock price from reaching the $4 NASDAQ requirement. The Preferred Shares will be converted in a measured and accretive manner over time, to create liquidity for institutional investors and finance future acquisitions

CONCLUSION

Whatever way you spin the R/S news, JBZY still seems to have rather bullish odds!

P.S. Bless you, art35 - you're a good man