From: Riggs Eckelberry
Los Angeles, July 21, 2011
I am pleased to report that we are right on plan. Today, we announced that OriginOil is proceeding with a 1-for-30 reverse stock split.
The main reason for the reverse stock split is to meet one of the requirements for graduating to a senior US exchange.
Dollars, Not Cents
To trade alongside bigger, well-known companies, our shares must trade in dollars, not cents. For initial listing, some exchanges require a minimum market price of at least $5.00 per share.
Another benefit of a higher price per share is that it will improve our ability to attract institutional investors.
As you know, we closed our first institutional round on July 11. We are hopeful that more institutional investors will soon find their way to OriginOil.
What’s a Reverse Stock Split?
In a forward stock split, a company increases the number of shares outstanding, resulting in a lower price per share.
In the case of our reverse stock split, we’re reducing the number of our shares outstanding by a factor of 30, resulting in a higher price per share.
A 1-for-30 reverse stock split of a 14-cent stock would theoretically result in a post-split price of $4.20 ($0.14 x 30). Of course, the actual price depends on market forces.
Does a Reverse Stock Split Change My Percentage Ownership of the Company?
No. After the reverse stock spilt, you will own a fewer number of OOIL shares that will trade at a higher price per share.
However, your percentage ownership of the company will be exactly the same as before the reverse stock split.
Need to know more? Tom Becker, Investor Relations, will be happy to talk to you at 877-999-6645 (outside the US, please call 702-531-7429). You can also email him at firstname.lastname@example.org.
Of course, you can always hit REPLY and get to me.
The Reverse Split is scheduled to take effect on or about August 3, 2011. At that point, a “D” will be added to our stock symbol.
So, for a short time, we will trade as “OOILD”. After 30 days, the symbol will revert back to OOIL.
Here’s An Example
I’m a founding shareholder of Carbon Sciences, which recently went through the same process, but on a 1-for-40 ratio.
You can see the stock trend, with the split marked, here.
We’re very happy with how that’s going. However, there’s no way to predict that OOIL will perform in the same way.
What I can tell you is that OriginOil is forging ahead on financial and business fronts, exactly as we planned; and, that the algae industry is taking off.
As always, thank you for your strong and continuing support. We are excited, and thankful.
Riggs and team
President & CEO
OriginOil, Inc. (OOIL)
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