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EnerJex Resources, Inc. has been cleared to submit a listing application to the NYSE MKT.
The Company's ability to become listed on the NYSE MKT is subject to, among other items, maintaining a minimum market price for its common stock for a sufficient period of time as determined by the NYSE MKT.
In an effort to meet the NYSE MKT's minimum market price requirement and gain exposure to a much broader audience of institutional and retail investors, EnerJex's Board of Directors unanimously approved a one-for-fifteen reverse stock split effective after the market close on May 30, 2014. This reverse stock split was approved by shareholders at the Company's 2013 annual meeting, and will take effect with trading beginning on Monday, June 2, 2014.
A number of factors were considered by EnerJex's Board prior to making this decision, including the expectation that this reverse stock split will facilitate the listing of Enerjex's common stock for trading on the NYSE MKT. The Board believes that listing on the NYSE MKT will improve the liquidity of EnerJex's stock and increase the chances that its trading price will more accurately reflect the underlying value that the Board believes to exist. In addition, the Board believes that listing on the NYSE MKT will enhance the Company's business development opportunities and improve its access to capital at favorable terms.
In considering the impact of the reverse stock split upon the possible trading range of EnerJex's common stock, the Board took into account among other factors, the experience of three other companies that underwent a reverse stock split since the beginning of 2013 in order to qualify for listing on the NYSE MKT. The chart below shows the changes in trading volume and share price experienced by such companies during the 30 and 90 trading days immediately subsequent to such reverse stock splits becoming effective. This chart does not take every factor into consideration, and there can be no assurance of what impact, if any, this reverse stock split or the planned listing on the NYSE MKT may have on the Company's trading volume and share price.
For the interim period, EnerJex's shares of common stock will continue to trade on the OTCQB market under the symbol ENRJD, with the "D" temporarily added to signify that the reverse stock split has occcured. A new CUSIP number has been assigned to the Company's common stock as a result of the reverse stock split, and EnerJex now has approximately 7.3 million common shares outstanding. Information letters will be sent to all shareholders of record by EnerJex's transfer agent, Standard Registrar and Transfer Company, and additional information about the reverse stock split can be found in the Company's Form 8-K filed today with the Securities and Exchange Commission.
EnerJex's CEO, Robert Watson, Jr., commented, "EnerJex has earned the ability to be on a larger stage, and I believe this transaction will prove to be rewarding for shareholders."