If you're looking for information about what a stock split (or reverse stock split) is, check out our blog post here.
This article will guide you through the Shoobx workflow to record a stock split. If you are unsure about whether your company has undergone a stock split, consult with your lawyer. Please note that this workflow will require that you upload evidence of the stock split and will not generate any documentation for a split.
Click on the link below for more information about what to expect during the workflow:
- Getting Started
- Provide Split Data
- Stock Incentive Plan
- Review Equity Promises
- Review Stock Certificates
To begin, select the "Stock Split' workflow and select whether or not you would like to upload the re-issued stock certificates in your company, or if you would prefer to generate them in Shoobx. Depending on what you would like to accomplish, you will want to check or uncheck the box on this first page before continuing.
Provide Split Data
Make sure to have the date of your stock split and the ratio (or split from X to Y) of the split handy. Once the data is entered, the next page in the flow will require you to submit information about the preferred stock in your company, if applicable. This portion of the flow will allow you to review the current conversion price for your preferred class(es) of stock and provide a new conversion price. You can edit this information by clicking on the paper and pen icon to the right of your preferred classes, as demonstrated below. Clicking on this edit button will also allow you to record a change in the original issue price.
Next, the workflow will require you to upload or defer a Board Approval of the stock split and Stockholder Approval.
Stock Incentive Plan
On the next screen of the workflow, after providing/defering approval documents, you'll be asked to upload your company's Amended Stock Incentive Plan (should your company have a SIP in place). Please note that at the end of this workflow, Shoobx will adjust the size of your Stock Incentive Plan by the split ratio.
Review Equity Promises
After providing the SIP documentation, you will be asked to review any outstanding equity promises your company might have. The grant amounts shown in the 'Grant Shares' workflow for these equity promises will be updated to reflect the new post-split amount once the split becomes effective.
Review Stock Certificates
Next, you'll be able to view all of your company's stock certificates (as they will be affected by the split). The first page of the flow displays the original stock certificates as they appeared prior to the stock split. On the next page you will be able to view the updated electronic certificates or you will be asked to upload the new certificates (depending on whether or not you checked the box on the first page of the workflow, asking you whether or not you wanted to upload the certificates affected by this split).
You will have the option to review all of the documents that you have uploaded (and the certificates you have generated, if applicable) at this point in time. You will also be able to send documents out to your legal team for review. Once you move past this screen, you will have recorded the stock split for your company and can no longer go back and make changes. It is at this point that the new certificates will go out for signature to the company's President and Secretary, if you selected to generate certificates in Shoobx.
After all certificates have been signed (or, if uploaded, once you move past the "Checkpoint" step), the stock split has been recorded in your Shoobx account and your cap table and stock ledger have been updated. If a change in authorized shares is required, please perform the Change Authorized Shares workflow now.
As always, if you have any questions feel free to reach out to email@example.com!