Today we announced that the Board of Directors has unanimously voted to approve a reverse split of our shares. This action comes two weeks after we received overwhelming shareholder approval in our recent special meeting of stockholders on November 26. A link to today’s news release can be found in the Press Release section of the QuickLogic website.
As I discussed in the blog post on October 7, the Board believes it is in our stockholder’s and QuickLogic’s best interest to maintain compliance for trading on the NASDAQ Capital Market. Moving off the NASDAQ Capital Market onto another market does not guarantee that QuickLogic would be able to return to the NASDAQ in a timely manner. Moreover, rather than create a disruption in the orderly flow of our trading, the Board concluded the most appropriate action was to follow the reverse split path to remain listed on the NASDAQ Capital Market.
Other factors the Board took into consideration was input from various parties that advised the current per share trading price of our common stock may affect its acceptability to certain institutional investors, professional investors and other members of the investing public. For example, many brokerage houses and institutional investors have told us they have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. The resulting higher share price after the reverse split could make our common stock more attractive to a broader range of investors.
The ratio of 1-for-14 was determined to be an appropriate point to put the share price well above the $1.00 minimum requirement and achieve a price high enough to satisfy the minimum price threshold required by a large part of the investment community.
Over the next few weeks, there will be a series of action items we will undertake in accordance with NASDAQ listing requirements. Below is a likely timeline of events we would be required to follow:
We are required to notify NASDAQ at least 15 calendar days before the effective date of the reverse stock split. Since we have a January 13 deadline to meet the NASDAQ rule of a closing Bid price of at least $1.00 for 10 consecutive trading days, we notified NASDAQ on December 6.
On or about December 24, 2019 – QuickLogic’s common stock will begin trading on a split-adjusted basis on the Nasdaq Capital Market (NASDAQ) at market open.
January 10, 2020 – Final date by which the stock must trade with a closing Bid price of at least $1.00 for 10 consecutive trading days.
For the two items above, we may choose to advance the process in order to give ourselves some guard band in the number of days.
We encourage our stockholders to sign up for e-mail alerts in order to receive timely news and SEC filings information. A link to the signup page can be found here: QUIK e-mail alerts
In closing, with this decision now behind us, we are intensely focused on executing on our strategic initiatives, and achieving the financial goals we have discussed in our recent investor events. This includes achieving operating breakeven or profitability by Q2 2020. I remain confident in the direction of our business and believe we have a clear pathway to reaching these important milestones.