The company is not ready to pull the trigger on this offering. They must seat the BoD before the offering takes place, for example.
A reverse split has to be filed with the Wyoming Business Registry. That has to be voted upon by shareholders, though they let Thompson and Rice vote on the last change without a full annual shareholder meeting. Until the authorization expired, the maximum possible reverse split was 100-to-1. At today’s share price, the reverse split would need to be about 140-to-1 to generate the $5.25 share price.
I don’t think this plan is anywhere near to being invoked. The first step will have to be to obtain authorization for a reverse split. Next, the BoD would have to be seated. Whoever was underwriting the public offering would have to be convinced the share price would not tank and I believe that they would want assurances of NASDAQ being ready to approve the uplist. NASDAQ is likely to ask KBLB to hold an annual shareholder meeting, seat the board, allow the new corporate governance structure to settle into place and only then to approve the uplist. They don’t want to list a company only to have it delisted a few months down the road (faster than ‘soon’ even).
Frankly, I don’t understand why KBLB doesn’t simply retract these SEC filings. If and when they get close enough to uplisting, they can file again.
For all these reasons, I am not worried about a reverse split or any reverse split ratio at the current time. That will change if Wyoming gets a filing to permit the reverse split or if Thompson asks shareholders to approve such an authorization. Until then, I suggest investors not worry overly much about a reverse split.
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