Interesting. I kinda suspected that such a massive consolidation of shares before going private serves them in a couple of different ways.
First off, they would reduce the number of shareholders in the private company to about 300 according to the filing, down from roughly 670.
The recent conversion of debt into common shares, before the announcement leads me to believe that they are attempting to grab as many commons as they possibly can before the R/S and going private.
They would be holding a large majority of the post split shares.
It would be a major tax advantage for officers to pay capital gains tax on dividends, rather than pay income tax on increased salaries once they go private and become profitable.
Although the filing said that they would not pay dividends on the common shares for the foreseeable future, you just never know how long that might be.
Holding long on a penny stock that is about to go private is not a good trading strategy, but I am willing to take the hit to see how things turn out.
Everyone has to make their own choices, but in this case, it could very well turn out to be a 100% loss once they go private. I think people need to be prepared for that outcome as well.
GLTA, IMO and FWIW.
