After a sharp decline last week, Electronic Cigarettes Intl Group Ltd (OTCMKTS:ECIG) started the week on a strong note. The company said shareholders voted to allow its board to approve a reverse stock split. However, the shareholders didn’t approve a measure to increase its authorized shares. The maker of disposable e-cigarettes and vaping products announced shareholders constituting two-thirds of its common stock passed a measure to permit the Board executes a reverse-stock split. The measure will reduce outstanding shares and will increase ECIG’s share price.
A proposal to amend Electronic Cigarettes articles of incorporation didn’t receive enough votes. Also, the proposal to increase the number of authorized shares to 350 million from 300 million was discarded by the voters. It was short of 50% threshold that is must for approval as merely 32.1% of voters supported the measure.
Dan O’Neill, the Executive Chairman of Electronic Cigarettes Intl Group Ltd (OTCMKTS:ECIG), said that the authorization to execute a reverse stock split will provide the company with much-needed flexibility to enhance its capital structure and improve the balance sheet. The measure comes after a steep decline in price of ECIG shares in past one year. The shares touched high of $18.80 on March 6, 2014 and then tumbled down to low of $0.09 in this year. After the news, ECIG shares surged more than 15% to close at $0.148 share with trading volume of more than 21.47 million.
Last week, Electronic Cigarettes reported to the SEC via an 8-K filing that it sold warrants and convertible notes for up to 28 million shares of common stock in February for $3 million. There was no press release issued on the filing. The convertible notes due four months from the issue date can be converted at a price of $0.05 per share, according to the filing.