Someone sent me a PM essentially asking why the company would need the reverse split option if there would be partnerships in place to drive the share price into Nasdaq regions. The questioner sees two alternatives:

1. Partnership(s) in place ⇒ no reverse split needed to get to Nasdaq.
2. No partnership in place ⇒ reverse split needed to get to Nasdaq.

So the questioner's conclusion is that if the company wants authorization for a reverse split, this means it doesn't expect partnerships. When reading this forum my impression is that the questioner is not alone with this line of thinking.

However, I don't agree. A reverse split would never be a means to get to the Nasdaq instead of a deal.

On the contrary, one or more partnerships are absolutely needed as a prerequisit for a Nasdaq application. As Peter Copetti said: "I would never go to the Nasdaq unless I had real partnerships in place." What Peter is saying here clearly means that partnerships could never be replaced by anything else, including a reverse split.

Partnerships and only partnerships are required to propel the share price above Nasdaq's $4 limit – with a safety margin being large enough to keep the closing bid price above $4 all the time (90 days). Only if the management feels the partnership-induced share price rise would still be too low to guarantee that, it would additionally execute a reverse split.

So we don't have the two options mentioned above, but the following three scenarios:

1. Partnership(s) in place, share price rises considerably to, say, $10 or above ⇒ no reverse split needed.
2. Partnership(s) in place, share price rises only somewhat to, say, $5 or so ⇒ reverse split needed to keep closing bid price above $4 for 90 trading days.
3. No partnership in place ⇒ no reverse split, no Nasdaq (mentioned here just for completeness).

The second alternative would be the only one that would require a reverse split, as an insurance against a share price rise that would "only" be 400 percent or so.

Personally I am going for the first alternative, because a partnership with a big name would bring POET Technologies into the spotlight and foster considerable investor interest. It could unlock the Pellegrino 2 valuation, which would mean a (fully-diluted) share price in the range of $4 to $18. Given that Pellegrino 2 reflects the company's state as of early 2014 and the company is much more valuable today, the share price should be more likely near the upper end than the lower one. But the market is the market, and you never know. So it is very reasonable to have the reverse split option in the company's tool box – just in case.