The 2:1 consolidationThe 2:1 consolidation is to give the company the ability to use it in the next 12 months. It's not a 8:1 or 15:1 it's a 2:1. They have over $6 million in the bank with similar revenue coming in Q2 (Q2 filing due Aug 16).
They don't need to do a 2:1 consolidation to finance. They have more than enough room in ther share allocation if they wanted to issue new shares but with $6 million and basically break even for the next couple quarters why would they?
Now lets say they reach $2 or $2.50 and look at the 2 options. (Yes I know that is a big assumption)
1) No preapproved consolidation so the share price hits $2-2.50 and they ask for a vote to do a 2:1 to uplist. What do you think the shorts would do. Pile on and push it back down to under $2. So a share consolidation happens but they don't meet the Nasdaq listing requirements and the whole cycle happens again.
2) They get pre approval. Stock hits $2-2.50. They halt the stock announce the 2:1 consolidation and open on the nasdaq. No opportunity to short.
There is a specific reason they only wanted 2:1. They could have asked for a 10:1 and just went there but they know the fall out that would be on shareholders and they have to show they have plans to move the share price first.
If they don't reach $2 or more it wont happen anyway so nothing lost. And a midnight consolidation and uplist is more appealing than letting the shorts get in the way.
In hindsight the 8:1 didn't work, the Aristotle roll out was not well planned and the company is getting better but the marketing is still underwhelming. But that's the past. They know they need to complete the Care deal, increase marketing, work with larger empoloyers etc. Tripp mentioned all these milestones being necessary in the confrenece call.
So assuming they do these things whats the best way to get uplisted:
1) Get pre approved for a 2:1 consolidation and use it after achieving $2-2.50
2) Ask for a vote after acheiving $2-2.50
3) Organically get to $4-5
Ideally all shareholders would like #3 but is that realistic and how long will that take?
If we can't have #3, #1 seems a better option given the recent activity of the shorts than option #2.