Akanda Announces Stock Consolidation
Akanda, an international medical cannabis company, announces a 1-for-40 reverse stock split effective May 23, 2024. This means every 40 shares of Akanda's ordinary shares will be consolidated into one. Trading will continue under the symbol 'AKAN' on Nasdaq with a new CUSIP number, 00971M304. No fractional shares will be issued; fractions will be rounded down. The split does not alter any shareholder's percentage interest, except for fractional share adjustments. The reverse split was approved by the board and shareholders, with Articles of Amendment filed with Ontario's government on the effective date.
- The 1-for-40 reverse stock split could potentially increase the share price, making it more attractive to institutional investors.
- Trading will continue on Nasdaq under the same ticker, ensuring market continuity.
- The reverse split has been uniformly applied, so no shareholder's percentage interest in the company is altered.
- Approval by both the board and shareholders indicates strong internal support for the move.
- The reverse stock split may signify underlying financial struggles or attempts to avoid delisting due to low stock prices.
- Fractional shares will be rounded down, potentially leading to minor losses for some shareholders.
- No new shares will be issued, potentially limiting liquidity.
Insights
A reverse stock split, such as this 1-for-40 split announced by Akanda Corp., is typically used by companies to raise the per-share price of their stock. This can be particularly relevant if the share price is very low and risks delisting from the stock exchange, in this case, the Nasdaq Capital Market. For retail investors, it's important to understand that while the number of shares you hold will decrease, the total value of your holdings remains the same, adjusted for the new share price.
Short-term implications include potential volatility in the stock price as the market digests the news. Some investors may view the reverse split as a negative signal, interpreting it as a sign that the company is struggling. This can lead to sell-offs, driving the share price lower before it stabilizes. Long-term impacts are less clear and depend on the company's future financial performance and strategic direction. If Akanda can leverage the higher share price to attract more institutional investors or raise additional capital, this could be beneficial.
It’s essential to keep an eye on how the company communicates its strategy post-split and whether it aligns with enhanced operational performance.
From a market perspective, reverse stock splits can sometimes be seen as a red flag. For Akanda, the decision to implement a 1-for-40 reverse stock split could be interpreted as an attempt to maintain listing requirements on the Nasdaq, which typically mandates a minimum share price. This move suggests that the company might be facing challenges in elevating its share price through organic growth and improved financial performance.
However, there are potential advantages. A higher share price can make the stock more attractive to institutional investors that may have policies against buying low-priced stocks. It may also improve liquidity as larger investors find it easier to buy and sell shares without significantly affecting the stock price. But, the key question for investors is whether Akanda can sustain this higher price through solid business fundamentals and market performance.
A critical insight here is to monitor post-split trading activity and management's strategic actions. Investors should be cautious and look for evidence of the company's path towards profitability and market competitiveness in the medical cannabis industry.
London, United Kingdom--(Newsfile Corp. - May 21, 2024) - Akanda Corp. (NASDAQ: AKAN) ("Akanda" or the "Company"), an international medical cannabis company, reported that it expects to implement a 1-for-40 reverse stock split on its ordinary shares effective May 23, 2024, with trading to begin on a split-adjusted basis at the market open on that day. Trading in the ordinary shares will continue on The Nasdaq Capital Market under the symbol "AKAN". The new CUSIP number for the ordinary shares following the reverse stock split is 00971M304.
Upon the effectiveness of the reverse stock split, every 40 shares of the Company's issued and outstanding ordinary shares will automatically be converted into one issued and outstanding ordinary share. No fractional shares will be issued as a result of the reverse stock split. Instead, any fractional shares that would have resulted from the split will be rounded down to the next whole number. The reverse stock split affects all shareholders uniformly and will not alter any shareholder's percentage interest in the Company's outstanding ordinary shares, except for adjustments that may result from the treatment of fractional shares.
The reverse stock split at a ratio of 1-for-40 shares was approved by the Company's board of directors and its shareholders. The Company will file Articles of Amendment with the Ontario Ministry of Government and Consumer Services to reflect the reverse stock split on May 23, 2024.
About Akanda Corp.
Akanda is an international medical cannabis and wellness platform company seeking to help people lead better lives through improved access to high quality and affordable products. Akanda's portfolio includes CanMart, a UK-based fully licensed pharmaceutical importer and distributor which supplies pharmacies and clinics within the UK. The Company's seed-to-patient supply chain also includes partnerships Cellen Life Sciences' Leva Clinic, one of the first fully digital pain clinics in the UK. Akanda also acquired the right to develop a Canadian farming property in British Columbia, including farming land and related operations and licenses. The Company plans to develop THC and cannabinoid (CBD) facilities at this site.
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Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain "forward-looking information" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Akanda's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Akanda's control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved" and similar expressions and include statements regarding the timing and completion of the proposed offering. Forward-looking information may relate to anticipated events or results including, but not limited to business strategy, product development and sales and growth plans. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Akanda does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except in accordance with applicable securities laws.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/209809
FAQ
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