SideChannel Inc (SDCH)

[kingfishers]

Reverse Split

There has been a lot of previous discussion on this board about what a reverse split means to us as shareholders. To me, the argument sort of boils down to two mind sets.

The traditional fear of a reverse split is that by shrinking the number of outstanding shares, each shareholder's holdings are reduced so drastically as to pretty much destroy value of that holding.

The other thought has to do with the fact that, even though each shareholder's total number of shares is drastically reduced, the share value possibly increases drastically. One of the side effects of a higher price per share is the ability of the company to be listed on a better exchange, e.g. Nasdaq, and possibly having a shot at big growth of the value of the shareholders reduced number of stocks in that company.

Well, whether or not we like or don't like the thought of a reverse split, there will most likely be one.

As has been reported before on this board, it looks like to me that one only has to read the more recent filings to see that CloudMD makes no bones about the reverse split. In at least two separate descriptions of deals, one with MediSouth and the other with Doctor's Network of America (DNA), it mentions what is surely a reverse split).

In the DNA deal, here is what it says. "If after the roll-back, the stock award shall equal $xxxxx divided by the current stock price. (Emphasis is mine.)

The other description (with Medisouth) of a reverse split states, "if this agreement is executed prior to Licensee's planned stock roll back..."... (Emphasis is mine.)

This is nothing new to most of us, but we can't say we have not been warned by CloudMD that there will, in all probability, be a reverse split.

KF