Item 3.03 Material Modification to Rights of Security Holders
Effective
A copy of the Certificate of Change filed with the Secretary of State of the
Certain Risks Associated with the Reverse Stock Split
The Reverse Stock Split will have possible anti-takeover effects.
Management of the Company may use the shares that will result from the effective increase in the number of authorized shares that will result from the approved Reverse Stock Split to resist a third-party transaction by, for example, diluting stock ownership of persons seeking to obtain control of the Company.
There can be no assurance that the total projected market capitalization of the Company's common stock after the proposed Reverse Stock Split will be equal to or greater than the total projected market capitalization before the proposed Reverse Stock Split or that the price per share of the Company's common stock following the Reverse Stock Split will either exceed or remain higher than the current anticipated per share.
There can be no assurance that the market price per new share of the Company common stock (the "New Shares") after the Reverse Stock Split will rise or remain constant in proportion to the reduction in the number of old shares of the Company common stock (the "Old Shares") outstanding before the Reverse Stock Split.
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Accordingly, the total market capitalization of the Company's common stock after the proposed Reverse Stock Split may be lower than the total market capitalization before the proposed Reverse Stock Split and, in the future, the market price of the Company's common stock following the Reverse Stock Split may not exceed or remain higher than the market price prior to the proposed Reverse Stock Split. In many cases, the total market capitalization of a company following a Reverse Stock Split is lower than the total market capitalization before the Reverse Stock Split.
There can be no assurance that the Reverse Stock Split will result in a per share price that will attract investors, and a decline in the market price for the Company's common stock after the Reverse Stock Split may result in a greater percentage decline than would occur in the absence of a Reverse Stock Split, and the liquidity of the Company's common stock could be adversely affected following a Reverse Stock Split.
The market price of the Company's common stock will also be based on the Company's performance and other factors, some of which are unrelated to the number of shares outstanding. If the Reverse Stock Split is effected and the market price of the Company's common stock declines, the percentage decline as an absolute number and as a percentage of the Company's overall market capitalization may be greater than would occur in the absence of a Reverse Stock Split. In many cases, both the total market capitalization of a company and the market price of a share of such company's common stock following a Reverse Stock Split are lower than they were before the Reverse Stock Split. Furthermore, the liquidity of the Company's common stock could be adversely affected by the reduced number of shares that would be outstanding after the Reverse Stock Split.
The Company's common stock trades as a "penny stock" classification which limits the liquidity for the Company's common stock.
The Company's stock is subject to "penny stock" rules as defined in Rule 3a51-1,
promulgated pursuant to the Securities Exchange Act of 1934, as amended. The
As a result, all brokers or dealers involved in a transaction in which the
Company's shares are sold to any buyer, other than an established customer or
"accredited investor," must make a special written determination. These
Exchange Act rules may limit the ability or willingness of brokers and other
market participants to make a market in our shares and may limit the ability of
the Company's stockholders to sell in the secondary market, through brokers,
dealers or otherwise. The Company also understands that many brokerage firms
will discourage their customers from trading in shares falling within the "penny
stock" definition due to the added regulatory and disclosure burdens imposed by
these Exchange Act rules. These disclosure requirements may have the effect of
reducing the level of trading activity in the secondary market for the common
shares in
Item 7.01 Regulation FD Disclosure.
On
The information contained in this Item 7.01, and in Exhibit 99.1, referenced herein is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act or incorporated by reference in any filing under the Securities Act, unless the Company expressly so incorporates such information by reference.
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits: Exhibit Description 3.1 Certificate of Change 99.1 Press Release, datedOctober 14, 2020 . 3
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