Background and Reasons for the Reverse Stock Split; Potential Consequences of the Reverse Stock Split.... much to do about nothing in the near term. Watch how people will spin this!
The Company’s common stock is quoted on the OTCQB under the symbol “CERP”. The shares of common stock of the Company have traded at very low prices for some time. As of February 7, 2013, the last reported closing price of the Company’s common stock was $0.05. The Reverse Stock Split is intended to increase the per share stock price. We believe that the Reverse Stock Split will make our common stock more attractive to a broader range of institutional and other investors, as we have been advised that the current market price of our common stock may affect its acceptability to certain institutional investors, professional investors and other members of the investing public. Many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. In addition, some of those policies and practices may function to make the processing of trades in low-priced stocks economically unattractive to brokers. Moreover, because brokers’ commissions on low-priced stocks generally represent a higher percentage of the stock price than commissions on higher-priced stocks, the current average price per share of common stock can result in individual stockholders paying transaction costs representing a higher percentage of their total share value than would be the case if the share price were substantially higher. We believe that the Reverse Stock Split will make our common stock a more attractive and cost effective investment for many investors, which will enhance the liquidity of the holders of our common stock. In addition, the Reverse Stock Split may enhance our ability to have our common stock listed on a national securities exchange, such as the NASDAQ Capital Market, where our common stock was previously listed, although we cannot provide any assurance that our minimum bid price would be or remain following the Reverse Stock Split over the minimum bid price requirement of any such stock exchange or that we will otherwise quality for such a listing. Accordingly, we believe that approval of the Reverse Stock Split is in the Company’s and our stockholders’ best interests.
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