Item 8.01 Other Events
The reverse split will combine and convert every one hundred shares of Seven Arts' outstanding common stock into one share of new common stock. Resulting fractional shares will round up to the next whole share. This will enable Seven Arts to continue its long-standing debt reduction program through the conversion of certain debt into equity.
Approximately 3,749,439 outstanding shares of common stock are expected after completion of the reverse split, and will trade under the new CUSIP number 81783N508 and under the trading symbol "SAPXD" and will revert to the historic trading symbol of "SAPX" after twenty trading days.
In connection with the reverse split, Seven Arts reduced the number of authorized shares of its common stock using the same 1-for-100 ratio. However, the number of authorized shares of its capital stock did not change. The Board of Directors then designated the resulting shares of Seven Arts' unallocated capital stock as authorized common stock, which resulted in an aggregate of 499 million authorized shares of common stock.
Prior to the reverse split and common stock allocation, Seven Arts did not have sufficient unissued and unreserved shares of common stock to continue its debt reduction program.