With unemployment rates at some of the lowest rates in 10 years, keeping good employees can be a challenge. Ownership in the company they work for is one benefit highly valued by many employees. We all want to be part of a growing business, make it successful, and know we will be rewarded for our hard work. Cimetrix wants to provide such ownership incentives to our employees and do it in such a way that is fair and motivating to the employees while being fiscally responsible to shareholders.
One of the impacts of the December 26, 2014 reverse stock split was the price per share value went up and number of shares went down. The pre-reverse stock split value went from $0.15 a share to a post-reverse stock split price of $1,500 a share (as of December 26, 2014). This reduction in shares and corresponding increase in share price made it fiscally impractical to use stock options as part of our incentive program moving forward. Therefore, the Cimetrix Board of Directors approved a transaction to perform a 1,000 to 1 forward split effective December 30, 2015.
The forward split transaction resulted in 3,928,000 shares outstanding as compared to the pre-forward split shares outstanding of 3,928 and decreased the share price by the same ratio. While the ownership position of all Shareholders remained the same pre and post forward-split, it adjusted the price per share to a much more manageable price for granting incentive stock options.
For Shareholders holding physical stock certificates, a letter of instruction from our Transfer Agent, Colonial Stock will be mailed out by February 1, 2016. Shareholders with stock in brokerage accounts should receive notification from their brokerage firm directly.
We believe this transaction will benefit both employees and shareholders by providing the right level of incentives to keep a smart and talented workforce.♦