While there are no plans to do a reverse split before the business combination, there is some potential for a reverse split sometime after the business combination if the stock stays beyond $1 for an extended amount of time. This would result in the combined company having 524.8 million shares (based on the March 18 information), composed of 145.3 million for legacy Torchlight shareholders and 379.4 million from Metamaterial shareholders exchanging into Torchlight. Source: Torchlight Energy - Schedule 14A - March 23 Each Metamaterial share would be exchanged for 3.563 Torchlight shares in this example, resulting in Metamaterial shareholders getting 379.4 million Torchlight shares. Metamaterial had 106.5 million shares outstanding at that time. As of March 18, Torchlight had 145.3 million shares outstanding. Torchlight's filing shows how the shares will be allocated after the business combination. One reason for the decline may be that Torchlight's SEC filings include an estimated combined value for the oil and gas assets and Metamaterial's business that is still lower than Torchlight's current share price. Torchlight's stock has declined a decent amount over the last few weeks. It currently needs to give notice of the related stockholder meeting by April 15 and hold that stockholder meeting by May 10. Torchlight Energy Resources ( TRCH) is getting closer to the time of its proposed merger with Metamaterial ( OTCPK:MMATF). Photo by luchschen/iStock via Getty Images
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