What is the economic impact to you, the shareholder?
A reverse split essentially means a decrease in the number of shares and a proportional increase in the value of the share price. Therefore, the reverse split in itself has no impact on the aggregate value of stock held by you as a shareholder.
Shareholders may be concerned about the potential negative impact to value. While the market perception of reverse splits is typically not a positive one, the company believes that with its current trajectory, this transaction will actually benefit the company by expanding the shareholder audience. It is management’s opinion that ultimately, value is created through positive results and revenue growth.
As
As previously communicated, management continues to focus on creating shareholder value through continued growth in revenue and gross margin, and moving towards becoming a cash-flow positive company. We believe this is how we will deliver positive growth and value to our investors.
Why did the company choose a 1-for-20 ratio?
The primary goal of the reverse stock split is to increase the per share market price of the company’s common stock to meet the minimum per share bid price requirement for continued listing on The Nasdaq Capital Market. As you may know, many individual investors, and some institutional investors, are prohibited from trading shares of companies below
Furthermore, the company has in the past suffered from substantial short pressure due to its low share price. With a larger dollar volume trading, and at a higher share price, management believes that the short pressure the company’s stock will face will be substantially reduced. This may also allow the share price to experience a more organic, market-driven movement, rather than the fluctuations and volatility experienced with a lower-priced stock.
“I understand the disappointment many of our shareholders feel, and the negative sentiment attached to the reverse stock split. I urge you to look at our company performance as measured by revenues, margins and cash, and you will see a good story developing”, said
Effective date of the reverse split and additional information
The reverse stock split will become effective at
As reported in the Company’s 8-K filed with the
As a result of the reverse stock split, every 20 shares of the Company’s common stock issued and outstanding will be automatically combined into one share of common stock. The reverse stock split will also affect the company’s outstanding stock options, warrants and other exercisable or convertible instruments and will result in the shares underlying such instruments being reduced and the exercise price being increased proportionately to the reverse stock split ratio. The common stock issued pursuant to the reverse stock split will remain fully paid and non-assessable. The reverse stock split will not affect the number of authorized shares of common stock or the par value of the common stock.
No fractional shares will be issued as a result of the reverse stock split. Any fractional shares that would have resulted will be settled in cash equal to the product of (i) the closing price of the common stock as reported on The Nasdaq Capital Market as of
Shareholders holding their shares in book-entry form or in “street name” (through a broker, bank or other holder of record) will not be required to take any action. Additional information about the reverse stock split can be found in the company’s definitive proxy statement filed with the
To effectuate the reverse stock split, the Company filed the Certificate of Amendment to its Third Amended and Restated Certificate of Incorporation, which was accepted for filing by the Secretary of State of the State of Delaware on SeptemberSeptem 21, 2023. There will be no change to the total number of authorized shares of Common Stock as set forth in the Third Amended and Restated Certificate of Incorporation of the Company, as amended.
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Forward-Looking Statements
This press release contains certain statements which constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. as amended, including, without limitation, statements concerning the expected timing of the reverse stock split, the impact of the reverse stock split on the Company’s share price, and the Company’s ability to meet the minimum per share bid price requirement for continued listing on The Nasdaq Capital Market. Forward-looking statements include, but are not limited to, statements regarding Precipio or its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, and are not guarantees of future performance. The words “may,” “will,” “believe,” “expect,” “continue,” “could,” “future,” “expect,” “may,” “potential,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions.
These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed. Important factors that could affect performance and cause results to differ materially from management’s expectations, or could affect the company’s ability to achieve its strategic goals, including, but not limited to, the following: the potential volatility of our common stock; and the potential delisting of our common stock from The Nasdaq Capital Market. These and other important factors discussed under the caption “Risk Factors” in the company's Annual Report on Form 10-K for the fiscal year ended
The company’s forward-looking statements in this press release are based on management’s current views, beliefs, assumptions and expectations regarding future events and speak only as of the date of this release. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.
Inquiries: investors@precipiodx.com +1-203-787-7888 Ext. 523
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