From the Cytosorb conf call

Investment Analysis Clubs Saul’s Investing Discussions
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And now I’d like to turn the Company’s planned up-listing. Management at CytoSorb remains committed to up-listing to a major national exchange before the end of 2014 because of the many advantages it will bring.

Currently, we have few institutional investors, because most hedged funds, pensions and mutual funds cannot invest in OTCBB companies that are penny stocks or less than a certain market cap and up-listing remove this restriction and will enable these lager investors to take positions in our stock.

We believe this will significant improve trading volume in our stock and thereby enhance liquidity for all our investors. We believe that an up-listing will also improve our visibility and credibility with the investment community.

Many research, analyst, know our company, and they follow our progress, but do not cover us, because we’re in OTCBB Penny Stocks. By removing this restriction, we would be a major set closer to expanding our research coverage. And importantly a national market listing would also reduce our cost of capital and enable us access to more sources of capital.

Previously we met with representatives at the NASDAQ and the NYSE MKT and we’ve reviewed and evaluated the listing requirements for each exchange. We’ve already taken many steps to prepare for the up-listing which I will review in some detail. In July 2014 we announced the Company’s consolidation of its SEC and International Legal Counsel with the Global Law Firm DLA Piper LLP.

DLA Piper is one of the largest international business law firms with offices in most major markets around the world and legal expertise across a broad range of practice areas, which include corporate and finance, litigation and arbitration, sarbanes oxley compliance, government affairs, labor law, intellectual property and technology and tax.

DLA Piper’s expertise particularly in the medical device sector will be invaluable as we execute our transition to a nationally listed company leader this year. We have since adopted a Code of Business Conduct and Ethics and we are currently updating our insider trading policy all of which required governance items for the major exchanges.

We’ve also made numerous improvements to our system of internal controls over financial reporting both here, in the U.S. and in Germany, and we are continuing in the process of selecting an independent third-party who will help to manage the documentation and testing of our system of internal controls which is another requirement for company traded on a major exchange.

Other activities to meet the remaining listing requirements are also underway. For example, we are currently actively interviewing financial experts to serve on our Board of Directors and act as a Chairperson of our, to be formed, Independent Audit Committee.

We are currently introducing those institutional investors to our story ahead of the up-listing, creating demand on the other side of an up-listing is a key part of our strategy. We are also working to simplify our capital structure.

We expect to enact a reverse stocks split to bring our stock price up to the minimum price required by the major exchanges. But this ratio will be dictated by the share price at the time of the up-listing.

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Saul,
Sounds like more progress for CytoSorb. I’m puzzling over the “We expect to enact a reverse stocks split” part in the last sentence. I understand the simple part of, I held 5 but they reverse split and now I only hold 1. My puzzling is on the value part. However, as I type (and think) I guess it makes sense. Generic example: I bought $100. worth (one thousand shares for $0.10/ea). They reverse split 1 for 10 to get share price to $1.00/share. I still own $100 worth of shares. Simply the share count is now 100 instead of 1000.
I second guessed and reacted because I once had an investment reverse split after a large loss of share price and no commensurate share price increase happened. Therefore I owned 1 share for every 8 I had held before and the share price remained below one dollar per share. Wound up as huge loss, obviously. Early in my career and lesson learned hopefully.
KLVanLiew

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Sounds like more progress for CytoSorb. I’m puzzling over the “We expect to enact a reverse stocks split” part in the last sentence.

KL,

There’s a simple reason. They want to be listed on the Nasdaq. The Nasdaq has a rule that you can’t be listed unless your stock price is $4 or $5 or something like that. So if Cytosorbs price is 60 cents say, they’d do a 1-for-10 reverse split, so the stock price would be $6.00 and they’d be eligible for listing.

Hope this helps

Saul

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once had an investment reverse split after a large loss of share price and no commensurate share price increase happened. Therefore I owned 1 share for every 8 I had held before and the share price remained below one dollar per share. Wound up as huge loss, obviously.

All reverse splits are not created equal!

When a stock is on the downward slide due to loss of competitiveness, reverse split is not going to stop the slide. On the contrary, it will show the desperation on the side of the company management and further dishearten investors. Additionally major exchanges have minimum share price requirement. If the stock price drops below the required amount, it will either be de-listed or be reverse-merged. One way or the other, stocks in those situations won’t fare well.

The reverse split mentioned in CTSO cc is in an entirely different situation. It is to be uplisted so that it can be owned by institutions. So I assume there might be some upward momentum at the time of the uplisting/reverse-merge.

Personally, I believe it is way too early for CTSO to do uplisting. I think it ought to focus on increasing sales and improving its fundamentals. It is a small company with limited resources. Unless supported by rising sales and strong fundamentals, upward stock price movement triggered by uplisting would be short-lived.

I am not sure why do they want to waste time and money on this. Do they want to lift the stock price so that they can do a secondary to fund business development? That would be a positive. Or do they become inpatient and want to sell shares? That won’t be so positive.

Regards.
-M

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I second guessed and reacted because I once had an investment reverse split after a large loss of share price and no commensurate share price increase happened. Therefore I owned 1 share for every 8 I had held before and the share price remained below one dollar per share. Wound up as huge loss, obviously. Early in my career and lesson learned hopefully.

In theory the stock price should have gone up by a factor of 8 but too often those companies that do reverse splits are doing it out of desperation to maintain a price above $1 for NASDAQ listing requirements (seems a silly requirement if you can just reverse split to comply).

I have seen many (and worked for one) that had done this many times only to see the stock drop quite quickly after the split losing a lot of value in a short period of time. But often it has been warranted, there was a reason the stock was in the toilet to begin with