This excerpt taken from the VSNT DEF 14A filed Jul 21, 2005.
Risks Associated with the Amendment
There are several risks associated with implementation of the Amendment, particularly the Reverse Stock Split. Consequently, shareholders should consider the following risk factors, among others, when voting on this proposal:
· There can be no assurance that the Amendment will increase the market price of our common stock. We cannot predict whether or not the proposed Amendment will increase the market price for our Common Stock or do so for any sustained time period. The history of similar reverse stock splits for companies in similar circumstances is varied. Specifically, we cannot assure you that the market price per share of Versant Common Stock as constituted after the Reverse Stock Split (a New Share) will increase in proportion to the reduction in the number of shares of Versant common stock outstanding before the Reverse Stock Split (Old Shares).
· Notwithstanding the Amendment, the market price of our Common Stock may not satisfy the Nasdaq $1.00 minimum bid price requirement. Even if the Reverse Stock Split does increase the market price of our Common Stock, there can be no assurance that it will have the effect of increasing the market price of our Common Stock to a price of $1.00 per share or more as required by Nasdaqs $1.00 minimum price requirement. In addition, even if the Reverse Stock Split increases the market price per share of our Common Stock to $1.00 or more per share, to regain compliance with Nasdaqs $1.00 minimum price requirement the market price of our Common Stock must be at least $1.00 per share for a minimum of ten successive trading days and possibly longer as required by Nasdaq. There can be no assurance that the Amendment will enable the market price of our Common Stock to be at or above $1.00 per share for a sufficient number of successive trading days to satisfy the conditions for regaining compliance with Nasdaqs $1.00 minimum price requirement.
· The Amendment might increase percentage declines in our stock price. The market price of our Common Stock will also be based on our performance and other factors, many of which are unrelated to the number of shares outstanding. If the Amendment is effected and the market price of our Common Stock declines, the percentage decline as an absolute number and as a percentage of our overall market capitalization may be greater than would occur in the absence of a Reverse Stock Split.
· The Amendment may reduce liquidity in the market for our Common Stock and increase the volatility of our stock. The liquidity of Versants Common Stock could be adversely affected by the reduced number of shares that would be outstanding after the Reverse Stock Split. A reduction in liquidity could make larger investors reluctant to buy our Common Stock because it could make it more difficult for them to buy and sell larger quantities of our stock without affecting its market price. In addition, the Reverse Stock Split could result in some shareholders owning odd lots of less than one hundred (100) shares of the Companys Common Stock on a post-split basis. Odd lots may be more difficult to sell, or may require greater transaction costs per share to sell than do board lots of even multiples of one hundred (100) shares. These potential impacts on the liquidity of our Common Stock may make the market price of our Common Stock more volatile.