HENDERSON, Nev., March 24, 2017 /PRNewswire/ -- LookSmart Group, Inc. (OTC-PINK: LKST or LKSTD) (the "Company") announced today that it completed a merger with LookSmart Capital Inc., a wholly owned subsidiary incorporated in the State of Nevada, with the surviving entity retaining its name "LookSmart Group, Inc." Additionally, the plan of merger provided for an exchange ratio of 1:100, which has the practical effect of a 1 for 100 reverse split of the Company's common stock.
This corporate action was approved by the Company's Board of Directors as authorized by Nevada corporate law. The effective 1 for 100 reverse stock split effected by the merger was effective on March 23, 2017 upon final approval by FINRA which was granted on March 21, 2017. The Company's trading symbol will be LKSTD for 20 business days. After 20 business days, the symbol will change back to LKST. The company also applied to be an OTC Pink Current/Alternative Reporting company as defined here: https://www.otcmarkets.com/marketplaces/otc-pink
After the reverse split, the shares outstanding of the company will be approximately 57,680 shares. The company will pay the cash-out of fractional shares at an amount equal to the pro-rata $20 per share, compared to the 10-day average market price of $9.80 per share based on the closing price of March 22nd, 2017.
The Company is undertaking the reverse stock split to reduce the number of record shareholders to fewer than 300 so that the Company can deregister its common stock and suspend its public reporting obligations under the Securities Exchange Act of 1934 (the "Exchange Act"). The Company has filed a Form 15 with the SEC.
Mike Onghai, the CEO of LookSmart Group, said, "This decision reflects our careful consideration, as a small public company, of a number of factors, including the significant cost of compliance with the many SEC and Sarbanes-Oxley requirements and the management time needed to satisfy those requirements. We expect to reduce substantial costs while freeing up valuable management time that can be applied to more productive initiatives. At this point in time, the management's resources, more than anything else, should be focused on increasing the cash flow of the business."
This press release contains "forward-looking statements," including statements related to our expectations related to cost savings and the use of management time. Forward-looking statements may be identified by their use of terms such as "anticipate", "believe", "anticipate", "confident", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "target", "will" and other similar terms. These statements are subject to significant risks and uncertainties, actual results and future events could differ materially from those projected, and we caution stockholders not to place undue reliance on the forward-looking statements contained in this press release. Risks and uncertainties exist related to the Company and its business due to a number of factors, including the statements under "Risk Factors" contained in our periodic reports filed with the SEC. Given these uncertainties, you should not place undue reliance on these forward-looking statements. We intend these forward-looking statements to speak only as of the date of this press release and undertake no duty or obligation to update any forward-looking statements contained in this press release as a result of new information, future events or changes in our expectations, except as required by law.
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SOURCE LookSmart Group, Inc.