DENVER, Dec. 15, 2010 /PRNewswire-FirstCall/ --
Earthstone Energy, Inc., formerly Basic Earth Science Systems, Inc.
(Earthstone, Basic or the Company) (OTC Bulletin Board: BSIC),
reported that yesterday the Company's Board of Directors (Board)
authorized and approved a one for ten (1-for-10) reverse split of
the Company's common stock. This action was taken pursuant to
shareholder approval of Proposal #6 of its Proxy Statement at its
Annual Meeting of Shareholders held on December 15, 2009. The Company now intends
to proceed with actions necessary to implement this Board action.
The Company expects the effective date of the reverse split
to occur within the next two to three weeks and will provide
further information as that date is finalized.
This action is expected to reduce the Company's 17 million
issued and outstanding shares of common stock to approximately 1.7
million shares. In further action, the Board has approved a
reduction in the number of the Company's authorized common stock
from 32 million shares to 6.4 million shares. These two
actions together will change the percentage of authorized shares
that have been issued from approximately 53% to approximately 27%.
In related actions, the Board also approved a reduction in
the number of the Company's authorized preferred stock from 3
million shares to 600,000 shares. In addition, the Board
voted to "round up" fractional shares of common stock rather than
redeem fractional shares with cash. The Board took this
action to reduce the administrative costs and burdens associated
with the reverse split and therefore believes it is beneficial for
all shareholders.
"We are pleased to announce this step, as it represents one of
the final remaining hurdles in our quest to become listed on a
national stock exchange," commented Ray
Singleton, President of Earthstone Energy, Inc. "In
the coming weeks, we intend to keep you updated as we complete the
remaining prerequisites to achieve this goal."
Singleton continued, "At this time, we want to emphasize to all
shareholders that this action, in and of itself, does not change
their percentage ownership in the Company or the value of
Earthstone stock in their portfolio. Furthermore, should the
share price move down below the Company's net asset value per
share, Earthstone has the authorization and capacity to buy back up
to 1.1 million shares."
Stockholders of record as of the effective date of the reverse
stock split will be sent a transmittal letter from Earthstone's
transfer agent with instructions on how to exchange his or her
certificate(s) (Old Certificates) for certificates representing the
appropriate number of post-reverse stock split shares (New
Certificates). The Company's transfer agent will act as the
exchange agent in implementing the exchange of those certificates.
No New Certificates will be issued to a stockholder until
that stockholder has surrendered any or all applicable Old
Certificates, together with a properly completed and executed
letter of transmittal, to the transfer agent. Any Old
Certificates submitted for exchange, whether because of a sale,
transfer or other disposition of stock, will automatically be
exchanged for New Certificates. If an Old Certificate has a
restrictive legend noted on the Old Certificate(s), the New
Certificate(s) will be issued with the same restrictive legends
noted on the New Certificate(s) unless that legend is no longer
effective because of the passage of time. Stockholders are
not required to exchange Old Certificates for New Certificates and
should not destroy any Old Certificate(s). Any Old
Certificate(s) not subject to restrictive legend, will still be
valid for trading and submission to banks, brokers or other
nominees for trading, but will be adjusted to reflect the
appropriate number of post-reverse stock split shares by that bank,
broker or other nominee for use in trading.
Banks, brokers or other nominees are instructed to effect the
reverse stock split for their beneficial holders holding the shares
of common stock in "street name" in the same manner as registered
stockholders whose shares of common stock are registered in their
names. Since these banks, brokers or other nominees may have
different procedures than registered stockholders for processing
the reverse stock split, any stockholder who holds shares of common
stock with a bank, broker or other nominee and has any questions in
this regard are encouraged to contact their bank, broker or other
nominee.
The Company recently changed its stock transfer agent from
Corporate Stock Transfer to First American Stock Transfer.
First American can be contacted at 877-271-0548 and is
located at 4747 N. 7th Street, Ste. 107, Phoenix, AZ 85014.
Earthstone Energy, Inc. is an independent oil and gas
exploration and production company with primary operations in the
Williston Basin, the Denver-Julesburg Basin in Colorado, southern Texas and the Gulf Coast area.
Earthstone Energy is traded on the Over The Counter Bulletin
Board under the symbol BSIC. Information on Earthstone Energy
can be found at its web site: www.earthstoneenergy.com.
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Some
statements contained in this release are forward-looking, and
therefore involve uncertainties or risks that could cause actual
results to differ materially. Forward-looking statements also
include comments regarding the future success of efforts to become
listed on a national stock exchange and the effect a reverse split
may have on the Company's stock price. Factors that could
cause actual results to differ materially include a number of
factors that could occur prior to or during the listing approval
process including; a reduction in the price or trading volume of
the Company's stock, economic and political events, a change in
exchange listing requirements or qualifications and a change in
government regulations. The Company disclaims any obligation to
update forward-looking statements.
SOURCE Earthstone Energy, Inc.