Number of outstanding shares now at 55.80 million. As a reminder to those who forgot the original reason for the 6-24-19 500:1 reverse split. The up-listing to a major exchange.
In determining which Reverse Stock Split ratio to implement, the Board may consider a number of factors, including the historical and then current trading price and trading volume of our Common Stock. Pursuant to the Reverse Stock Split, each number of specific shares of our Common Stock (between 150 and 500 depending on the ratio) will be automatically, without any further action by the Stockholders, be combined and reclassified into one (1) validly issued, fully paid and nonassessable share of Common Stock. The Reverse Stock Split will also cause a corresponding pro-rata decrease of the number of the Company’s authorized shares of Common Stock in accordance with the Reverse Stock Split ratio. No fractional shares of Common Stock will be issued as the result of Purpose and Effect of the Reverse Stock SplitOur Board believes that, among other reasons, the number of outstanding shares of our Common Stock and very low trading price of our Common Stock have contributed to a lack of investor interest in the Company from institutional and other investors and has made it difficult for the Company to attract new investors and conduct equity financings on attractive terms or at all. Our Board believes that it may be necessary and prudent for the Company to amend our Certificate of Incorporation to effect the reverse stock split because it would reduce the number of outstanding shares of our Common Stock to a level more consistent with other public companies with a similar anticipated market capitalization. Additionally, a reverse stock split should have the effect of raising the minimum bid price of our Common Stock on the OTCQB market, which was $0.0117 per share as of March 15, 2019. The Board believes it will be beneficial to the stockholders if our Common Stock is traded on a recognized stock exchange, either The Nasdaq Capital Market or NYSE American (an “Exchange”). In the future we hope to apply to list our Common Stock on an Exchange as soon as we are eligible to do so following the consummation of the Reverse Stock Split, a future public capital raise and satisfaction of other listing requirements and conditions. The Nasdaq Capital Market for example has minimum bid price requirement for new applicants of $4.00 per share. However, a company may qualify under a closing price alternative of $3.00 or $2.00 if the company meets varying requirements. On March 15, 2019, the last reported bid price of our Common Stock as reported by the OTCQB was $0.0117 per share. Although the Board believes that the Reverse Stock Split will enable the Company to meet these minimum market price requirements, there is no assurance that we will establish and maintain a market price in excess of the required level following the Reverse Stock Split or that even if we do establish such market price that any application to an Exchange would be successful. The effect of the Reverse Stock Split, if any, upon the stock price for our Common Stock cannot be predicted, and the history of similar stock split combinations for companies like us is varied. We also cannot assure you that the stock price of our Common Stock after the Reverse Stock Split will rise in proportion to the reduction in the number of shares of Common Stock outstanding as a result of the Reverse Stock Split because, among other things, the stock price of our Common Stock may be based on our performance and other factors as well. If we are successful in listing our Common Stock on an Exchange, the Board believes that such a listing will positively impact our ability to raise additional equity capital. However, there is also no assurance that we would be able to raise additional equity capital in a public offering or otherwise. Further, we are not currently eligible to make such application to list on an Exchange and cannot guarantee that we will be eligible in the future, or if we are eligible, that we will make such application or that such application will be approved.
