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NewLead to undertake its sixth reverse stock split in six years

Shareholders in NewLead Holdings have voted to undertake another reverse stock split this year, which will be the sixth consolidation of NewLead’s shares since 2010.

At the company’s annual general meeting in Athens on December 23, shareholders also voted to re-elect NewLead’s CEO Michael Zolotas as the company’s class I director and elect Samuel Gulko as its Class II director, the company confirmed in a filing to the US SEC.

Its common shares will be consolidated “at a ratio of not less than 1-for-20 and not more than 1-for-1000 at any time prior to June 30, 2016”, the filing said. NewLead’s board of directors will decide how and when the reverse stock split will be effected.

NewLead’s outstanding common shares stood at 2,679,942,148 shares on November 23, 2015, including 847,914,732 shares of restricted stock. By December 22, 2015, the number of outstanding common shares had grown to 6,065,897,349, of which 1,599,010,412 shares are restricted stock.

The stock currently trades in the over-the-counter (OTC) market, after NewLead delisted from the NASDAQ stock exchange in July 2014. The company was recently upgraded to a pink-sheet stock, moving from the grey-sheet OTCBB marketplace to the OTC Pink. NewLead’s stock closed at $0.0001 per share on December 31.

NewLead’s last reverse split was completed on a 1:50 basis on July 15, 2014. This was the last of three share consolidations that year, of which two were on a 1:50 basis. The split reduced NewLead’s total outstanding shares from 325m to approximately 6.5m afterwards.

To look back at NewLead’s record of reverse stock split means looking at big numbers (see table below). Dilution seems to have been a recurring pattern, but now share issuance appears to have shifted up a gear. The number of NewLead’s common shares has jumped by a staggering 93,321% over the past 18 months since July 15, 2014, in spite of the consolidations.

The company’s report for the fiscal year 2014 shows NewLead mainly issues shares for payment in lieu of cash. A total of 116,226,404 common shares were issued between January 1 and May 12, 2015, according to the report.

Some 84,201,648 of these shares were issued to make up the share proceed guarantees and conversion of convertible notes during the period; 15,902,150 shares were issued between three different shipping companies as part of the consideration for bitumen tankers sold to NewLead that year. Another 16,122,606 common shares were issued during the period for the conversion of an 8% secured convertible redeemable note with Toledo Advisors, dated April 20, 2015.

Date of completed consolidation
Split ratioNumber of common shares before split
Number of common shares after split
As of December 22, 2015TBA6,065,897,349TBA
July 15, 20141:50325,000,0006,500,000
Delisted from NASDAQ
July 22, 2014
May 15, 20141:50519,543,70010,390,874
March 6, 20141:1053,721,525
5,372,153
December 6, 20131:347,663,63315,887,878
October 17, 20131:15700,542,01946,702,802
August 3, 20101:1288,363,2657,363,605

 

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Holly Birkett

Holly is Splash's Online Editor and correspondent for the UK and Mediterranean. She has been a maritime journalist since 2010, and has written for and edited several trade publications. She is currently studying for membership of the Institute of Chartered Shipbrokers. In 2013, Holly won the Seahorse Club's Social Media Journalist of the Year award. She is currently based in London.
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