Quest Resource Holding (QRHC) Announces One-for-Eight Reverse Stock Split
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Quest Resource Holding Corporation (NASDAQ: QRHC) announced that a 1-for-8 reverse stock split of its common stock became effective at 5:00 p.m., Eastern time, on Wednesday, August 10, 2016.
Upon the effectiveness of the reverse stock split, each lot of eight shares of Quest's common stock was converted into and became one share of common stock. In lieu of issuing any fractional shares, Quest will round up to the nearest whole share in the event a stockholder would be entitled to receive less than one share of common stock.
"We believe this reverse stock split is an important step in attracting a broader spectrum of investors and will enable us to maintain our NASDAQ presence," commented Ray Hatch, President and Chief Executive Officer of Quest. "Our board and management view our NASDAQ listing as an important factor in supporting stock liquidity and as a foundation for supporting stockholder value as we execute on our growth strategy."
The reverse stock split is designed to lead Quest's common stock to trade at approximately eight times the price per share at which it traded prior to the effectiveness of the reverse stock split. Quest, however, cannot assure that the price of its common stock after the reverse stock split will reflect the 1-for-8 reverse stock split ratio, that the price per share following the effective time of the reverse stock split will be maintained for any period of time, or that the price will remain above the pre-reverse stock split trading price.
Prior to the reverse stock split, there were 118,756,012 shares of Quest's common stock outstanding. Effecting the 1-for-8 reverse stock split will reduce that amount to approximately 14,844,502. The reverse stock split will not change the number of shares of Quest's authorized common stock or preferred stock, which will remain at 200,000,000 shares and 10,000,000 shares, respectively.
The number of common shares related to Quest's outstanding stock options, warrants, and restricted stock, as well as the relevant exercise price per share, will be proportionally adjusted to reflect the reverse stock split. The number of shares authorized for issuance under Quest's equity incentive plans will also be proportionally reduced to reflect the reverse stock split.
Quest has retained its transfer agent, Continental Stock Transfer & Trust Company ("Continental"), to act as its exchange agent for the reverse stock split. Continental will provide stockholders of record as of the effective date of the reverse stock split a letter of transmittal providing instructions for the exchange of stock certificates. Stockholders owning shares via a broker or other nominee will have their positions adjusted to reflect the reverse stock split, without being required to take any action in connection with the reverse stock split.
At the 2016 Annual Meeting of Stockholders, held on June 15, 2016, stockholders approved a proposal to authorize Quest's Board of Directors to amend its articles of incorporation to effect an up to 1-for-10 reverse stock split of its common stock, with the exact ratio to be determined by the Board of Directors in its discretion at any time prior to August 29, 2016. The 1-for-8 reverse stock split was approved by Quest's Board of Directors on August 9, 2016.
Additional information regarding Quest's reverse stock split is available in the Definitive Proxy Statement filed by Quest with the Securities and Exchange Commission on April 29, 2016.
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