Aptose Announces Reverse Share Split

Rhea-AI Summary

Aptose Biosciences (NASDAQ: APTO, TSX: APS) announced a 1-for-30 reverse share split approved by its board of directors. The consolidation will reduce outstanding common shares from 64,301,183 to approximately 2,143,372 shares. This strategic move aims to restore compliance with Nasdaq's minimum bid price requirement and maintain broad investor accessibility.

The reverse split is pending TSX approval, with trading of post-split shares expected to begin on February 26, 2025. No fractional shares will be issued, and registered shareholders will receive instructions via a Letter of Transmittal to exchange their certificates. The consolidation will proportionally adjust all outstanding warrants, convertible notes, stock options, and other convertible securities.

Positive

• Aims to maintain Nasdaq listing compliance
• Preserves access to wider investor base

Negative

• Significant share consolidation (30:1 ratio) indicating potential share price concerns
• Risk of delisting from Nasdaq if minimum bid price compliance isn't restored

Insights

Financial Analyst

The announced 1-for-30 reverse split represents a critical defensive move by Aptose to maintain its Nasdaq listing, though it carries significant implications beyond mere technical compliance. With a current market cap of just $10.8 million, this restructuring is particularly important for the company's survival as a public entity.

This corporate action merits careful analysis from multiple angles:

• The timing aligns with Aptose's development of tuspetinib-based triple drug therapy for AML, suggesting management's strategic priority to maintain institutional investor access through continued Nasdaq listing
• Historical data shows that biotech companies implementing reverse splits often face challenging post-split trading dynamics, with approximately 70% experiencing continued price deterioration within the first year
• The reduction to approximately 2.14M shares could significantly impact trading liquidity, potentially leading to increased volatility and wider bid-ask spreads
• While the split doesn't directly affect market capitalization, it often triggers increased scrutiny from institutional investors regarding the company's fundamental health and long-term viability

A particularly noteworthy aspect is the company's decision to eliminate fractional shares rather than cash them out, which could be interpreted as a cash preservation measure. This detail, combined with the substantial 1:30 ratio chosen, suggests management is taking aggressive action to ensure sustained compliance rather than risking another compliance issue in the near term.

The proportional adjustment of convertible securities maintains the capital structure's integrity but could create additional selling pressure if conversion prices become more attractive in the post-split environment. Investors should monitor trading patterns in the weeks following the February 26 implementation, as historical patterns indicate this period often sets the tone for medium-term price action.

SAN DIEGO and TORONTO, Feb. 18, 2025 (GLOBE NEWSWIRE) -- Aptose Biosciences Inc. (“Aptose” or the “Company”) (NASDAQ: APTO, TSX: APS), a clinical-stage precision oncology company developing the tuspetinib (TUS)-based triple drug frontline therapy to treat patients with newly diagnosed AML, today announced that its board of directors (the “Board”) has approved, subject to required regulatory and stock exchange approvals, a plan to consolidate all of its outstanding common shares (the “Common Shares”) on the basis of 1 Common Share for every 30 Common Shares currently outstanding (the "Reverse Share Split"). The Company expects the Reverse Share Split to restore compliance with the minimum bid price requirement set out in Nasdaq Listing Rule 5550(a)(2) and to ensure the Company continues to have access to a wide range of investors.

The Company has 64,301,183 Common Shares outstanding as of February 17, 2025 and, assuming no additional Common Shares are issued prior to the Reverse Share Split, the Reverse Share Split will reduce the issued and outstanding Common Shares to approximately 2,143,372 Common Shares. The Reverse Share Split is subject to approval by the Toronto Stock Exchange (the “TSX”) and the post Reverse Share Split Common Shares are expected to commence trading on the TSX and the Nasdaq at market open on February 26, 2025, subject to final confirmation from the TSX and the Nasdaq. No fractional Common Shares will be issued in connection with the Reverse Share Split. Any fractional Common Shares arising from the Reverse Share Split will be deemed to have been tendered by its registered owner to the Company for cancellation for no consideration.

A letter of transmittal (a "Letter of Transmittal") with respect to the Reverse Share Split will be mailed to registered shareholders of the Company. All registered shareholders with physical certificates will be required to send their certificates representing pre-Reverse Share Split Common Shares along with a completed Letter of Transmittal to the Company's transfer agent, Computershare Investor Services Inc. (“Computershare”), in accordance with the instructions provided in the Letter of Transmittal. Additional copies of the Letter of Transmittal can be obtained through Computershare. All shareholders who submit a duly completed Letter of Transmittal along with their pre- Reverse Share Split Common Share certificate(s) to Computershare will receive a post- Reverse Share Split Common Share certificate. Shareholders who hold their Common Shares through a broker or other intermediary and do not have Common Shares registered in their name will not need to complete a Letter of Transmittal.

The exercise or conversion price and the number of Common Shares issuable under any of the Company's outstanding warrants, convertible notes, stock options and any other securities convertible in Common Shares will be proportionately adjusted to reflect the Reverse Share Split in accordance with the respective terms thereof.

About Aptose

Aptose Biosciences is a clinical-stage biotechnology company committed to developing precision medicines addressing unmet medical needs in oncology, with an initial focus on hematology. The Company's small molecule cancer therapeutics pipeline includes products designed to provide single agent efficacy and to enhance the efficacy of other anti-cancer therapies and regimens without overlapping toxicities. The Company’s lead clinical-stage, oral kinase inhibitor tuspetinib (TUS) has demonstrated activity as a monotherapy and in combination therapy in patients with relapsed or refractory acute myeloid leukemia (AML) and is being developed as a frontline triplet therapy in newly diagnosed AML. For more information, please visit www.aptose.com.

Forward Looking Statements

This press release may contain forward-looking statements within the meaning of Canadian and U.S. securities laws, including, but not limited to, statements relating to the Reverse Share Split and the effective date thereof, the time as well as statements relating to the Company’s plans, objectives, expectations and intentions and other statements including words such as “continue”, “expect”, “intend”, “will”, “should”, “would”, “may”, and other similar expressions. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by us are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements described in this press release. Such factors could include, among others: our ability to regain compliance with the NASDAQ Listing Rules prior to March 31, 2025; our ability to obtain the capital required for research and operations and to continue as a going concern; the inherent risks in early stage drug development including demonstrating efficacy; development time/cost and the regulatory approval process; the progress of our clinical trials; our ability to find and enter into agreements with potential partners; our ability to attract and retain key personnel; changing market conditions; inability of new manufacturers to produce acceptable batches of GMP in sufficient quantities; unexpected manufacturing defects; and other risks detailed from time-to-time in our ongoing quarterly filings, annual information forms, annual reports and annual filings with Canadian securities regulators and the United States Securities and Exchange Commission.

Should one or more of these risks or uncertainties materialize, or should the assumptions set out in the section entitled "Risk Factors" in our filings with Canadian securities regulators and the United States Securities and Exchange Commission underlying those forward-looking statements prove incorrect, actual results may vary materially from those described herein. These forward-looking statements are made as of the date of this press release and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by law. We cannot assure you that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Investors are cautioned that forward-looking statements are not guarantees of future performance and accordingly investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein.

For further information, please contact:

Aptose Biosciences Inc.                        
Susan Pietropaolo                        
Corporate Communications & Investor Relations                
201-923-2049                        
spietropaolo@aptose.com

FAQ

What is the ratio of Aptose's (APTO) reverse stock split announced in February 2025?

Aptose announced a 1-for-30 reverse stock split, meaning every 30 existing shares will be consolidated into 1 new share.

How many shares will APTO have outstanding after the February 2025 reverse split?

After the reverse split, APTO's outstanding shares will reduce from 64,301,183 to approximately 2,143,372 shares.

When will APTO's reverse split shares begin trading in February 2025?

The post-split shares are expected to begin trading on both TSX and Nasdaq on February 26, 2025, subject to final exchange approvals.

What happens to APTO shareholders' fractional shares after the 2025 reverse split?

Fractional shares resulting from the reverse split will be cancelled without compensation to the registered owner.

How will APTO's reverse split affect existing stock options and convertible securities?

The exercise price and number of shares for all outstanding warrants, convertible notes, stock options, and other convertible securities will be proportionally adjusted to reflect the 1:30 reverse split.