Yes, the reverse is going to be necessary because they agreed to issue 70% of the resulting company shares to Irus Group. Considering the company only has a 75M authorized share structure, a reverse is needed in order to not only be able to issue the shares to pay off debt, however also give Irus Group a stake in the new company. I initially thought the 57-60M shares that was referenced in the 8K was going to be issued to them, however those shares are being issued to satisfy their outstanding debt. Now we know that any shares that get issued are going to be 144 restricted stock that cannot be sold for at least 6 months. We have an O/S currently that is just over 17M shares. So they will issue another ~40-42M shares to reduce their debt, then they will reverse with a likely 1:10 ratio, which will leave around 5.7 or 6M post split shares. Then they will issue another 14M shares to the Irus group leaving around a resulting O/S of 20M shares O/S in the new company. At first I wasn't too pleased about it all, however one thing that won't increase is the float after all is said and done. We essentially still keep our same ownership percentage in the float, although see our position in the overall company diluted. However, the float is what I would prefer anyways, and considering we should see at least 6 months of dilution free trading, we should still make out well assuming any new buying, whether pre or post R/S.
My post is only my opinion, I recommend you always do your own DD! I am not a licensed broker or a professional by any means, so take what I say as entertainment value at best.
