180 Life Sciences Corp. Announces 1-For 19 Reverse Stock Split as Part of Nasdaq Compliance Plan
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Insights
A reverse stock split is a corporate action where a company reduces the total number of its outstanding shares by converting multiple old shares into fewer new shares. The primary aim behind 180 Life Sciences Corp.'s 1-for-19 reverse stock split is to boost the share price to comply with Nasdaq's minimum bid price requirement. This is a strategic move to avoid delisting, which can have severe consequences for a company's ability to raise capital and for investor perception.
From an investment perspective, reverse splits are often viewed with skepticism as they could indicate underlying issues with the company's financial health or growth prospects. However, in some cases, it can also be perceived as a company's commitment to maintaining its listing status and improving its marketability. In the short-term, the adjustment in share price and the number of shares outstanding will likely lead to increased volatility. Investors should monitor the stock's performance closely post-split to gauge market sentiment.
Long-term implications include the potential for improved liquidity and access to institutional investors, who may have policies against investing in stocks below certain price levels. Nevertheless, the reverse split does not fundamentally alter the company's valuation and the market will ultimately judge the company's worth based on its performance and growth trajectory.
The decision to implement a reverse stock split often reflects broader issues within a company's industry or specific challenges faced by the company. For 180 Life Sciences Corp., the biotechnology sector is one where stock prices can be particularly volatile, given the high costs of research and development, regulatory hurdles and the binary nature of clinical trial outcomes. Investors should consider how the company's pipeline, competitive position and financial health compare to industry norms.
Adjustments to equity incentive plans and securities such as options and warrants as a result of the reverse split may also affect employee morale and retention. Companies in the biotech field heavily rely on their ability to attract and retain top talent, who are often partly compensated through equity-based incentives. The adjustments to these incentives following a reverse split must be communicated effectively to maintain trust and motivation among employees.
Additionally, the issuance of whole shares in lieu of fractional shares can result in a slight increase in the company's outstanding shares, which might have a minor dilutive effect. This is typically not a significant concern but should be acknowledged as part of the overall impact.
From a legal standpoint, the reverse stock split's compliance with regulatory requirements is crucial. The process involves legal considerations, including stockholder approval and filings with the SEC. The definitive proxy statement and the upcoming Form 8-K are key documents that provide transparency and details about the reverse split, ensuring that stockholders are adequately informed.
It is also important to note the legal implications of adjusting outstanding options, warrants and equity incentive plans. These adjustments must adhere to the terms set forth in the securities' governing documents to avoid legal disputes or claims of unfair treatment by security holders. The company must execute these adjustments meticulously to maintain legal and financial integrity.
Moreover, the reverse split does not change the authorized number of shares of common or preferred stock, which means the company retains the flexibility to issue additional shares in the future. This could be a strategic advantage for raising capital, though it also opens the possibility of future dilution for current shareholders.
PALO ALTO, Calif., Feb. 26, 2024 (GLOBE NEWSWIRE) -- 180 Life Sciences Corp. (NASDAQ: ATNF) (“180 Life Sciences” or the “Company”), today announced that it will conduct a reverse stock split of its outstanding shares of common stock at a ratio of 1-for-19 (the “Reverse Stock Split”). The Reverse Stock Split is expected to become effective on February 28, 2024 at 12:01 p.m. Eastern Time (the “Effective Time”), with shares expected to begin trading on the Nasdaq Capital Market, on a split-adjusted, at market open on February 28, 2024. In connection with the Reverse Stock Split, every 19 shares of the Company’s common stock issued and outstanding as of the Effective Time will be automatically converted into one share of the Company’s common stock. No change will be made to the trading symbol for the Company’s shares of common stock or public warrants, “ATNF” and “ATNFW”, respectively, in connection with the reverse split.
The Reverse Stock Split is part of the Company’s plan to regain compliance with the minimum bid price requirement of
The Reverse Stock Split was approved by the Company's stockholders at the Company's Special Meeting of Stockholders held on February 16, 2024 (the “Special Meeting”) to be effected in the Board’s discretion within approved parameters. Following the Special Meeting, the final ratio was approved by the Company's Board on February 16, 2024.
The Reverse Stock Split will reduce the number of shares of the Company's outstanding common stock from approximately 11.3 million shares (as of the date of this press release, when including issuances in process) to approximately 0.6 million shares, subject to adjustment for rounding, as discussed below and potential additional issuances through the effective date of the Reverse Stock Split.
The reverse split will affect all issued and outstanding shares of common stock. All outstanding options, warrants, and other securities entitling their holders to purchase or otherwise receive shares of common stock will be adjusted as a result of the reverse split, as required by the terms of each security. The number of shares available to be awarded under the Company’s equity incentive plans will also be appropriately adjusted. Following the reverse split, the par value of the Common Stock will remain unchanged at
Additional information regarding the reverse stock split is available in the Company’s definitive proxy statement originally filed with the U.S. Securities and Exchange Commission (SEC) on December 16, 2023 and a Current Report on Form 8-K which the Company plans to file following the Effective Time.
About 180 Life Sciences Corp.
180 Life Sciences Corp. is a clinical stage biotechnology company focused on the development of therapeutics for unmet medical needs in chronic pain, inflammation and fibrosis by employing innovative research, and, where appropriate, combination therapy. The Company’s current primary focus is a novel program to treat several inflammatory disorders using anti-TNF (tumor necrosis factor).
Forward-Looking Statements
This press release includes “forward-looking statements”, including information about management’s view of the Company’s future expectations, plans and prospects, within the safe harbor provisions provided under federal securities laws, including under The Private Securities Litigation Reform Act of 1995 (the “Act”). Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results and, consequently, you should not rely on these forward-looking statements as predictions of future events. These forward-looking statements and factors that may cause such differences include, without limitation, the review and evaluation of strategic transactions and their impact on shareholder value; the process by which the Company engages in evaluation of strategic transactions; the outcome of potential future strategic transactions and the terms thereof; the ability of the Company to raise funding, the terms of such funding, and dilution caused thereby; the ability of the Company to maintain the continued listing of the Company’s securities on The Nasdaq Stock Market, including that the Company is not currently in compliance with Nasdaq’s continued listing standards; risks regarding the outcome of pharmaceutical studies, the timing and costs thereof, and the ability to obtain sufficient participants; our ability to commercialize drug candidates, if proven successful for treatment in trials; risks regarding whether the administrative processes required for the issuance of patents will be completed in a timely manner or at all, whether patents, if issued, will provide sufficient protection and market exclusivity for the Company; whether any patents held by the Company may be challenged, invalidated, infringed or circumvented by third parties; events that could interfere with the continued validity or enforceability of a patent; the Company’s ability generally to maintain adequate patent protection and successfully enforce patent claims against third parties; the timing of, outcome of, and results of, clinical trials statements regarding the timing of marketing authorization application (MAA) submissions to the UK Medicines and Healthcare products Regulatory Agency (MHRA) and New Drug Application submissions (NDA) to the U.S. Food and Drug Administration (FDA), our ability to obtain approval and acceptance thereof, the willingness of MHRA to review such MAA and the FDA to review such NDA, and our ability to address outstanding comments and questions from the MHRA and FDA; statements about the ability of our clinical trials to demonstrate safety and efficacy of our product candidates, and other positive results; the uncertainties associated with the clinical development and regulatory approval of 180 Life Sciences’ drug candidates, including potential delays in the enrollment and completion of clinical trials, the costs thereof, closures of such trials prior to enrolling sufficient participants in connection therewith, issues raised by the FDA, the MHRA and the European Medicines Agency (EMA); the ability of the Company to persuade regulators that chosen endpoints do not require further validation; timing and costs to complete required studies and trials, and timing to obtain governmental approvals; the accuracy of simulations and the ability to reproduce the outcome of such simulations in real world trials; 180 Life Sciences’ reliance on third parties to conduct its clinical trials, enroll patients, and manufacture its preclinical and clinical drug supplies; the ability to come to mutually agreeable terms with such third parties and partners, and the terms of such agreements; estimates of patient populations for 180 Life Sciences planned products; 180 Life Sciences’ ability to fully comply with numerous federal, state and local laws and regulatory requirements, as well as rules and regulations outside the United States, that apply to its product development activities; current negative operating cash flows and a need for additional funding to finance our operating plans; the terms of any further financing, which may be highly dilutive and may include onerous terms, increases in interest rates which may make borrowing more expensive and increased inflation which may negatively affect costs, expenses and returns; statements relating to expectations regarding future agreements relating to the supply of materials and license and commercialization of products; the availability and cost of materials required for trials; the risk that initial drug results are not predictive of future results or will not be able to be replicated in clinical trials or that such drugs selected for clinical development will not be successful; challenges and uncertainties inherent in product research and development, including the uncertainty of clinical success and of obtaining regulatory approvals; uncertainty of commercial success; 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 and economic conditions; competition, including technological advances, new products and patents attained by competitors; challenges to patents; changes to applicable laws and regulations, including global health care reforms; expectations with respect to future performance, growth and anticipated acquisitions; expectations regarding the capitalization, resources and ownership structure of the Company; the ability of the Company to execute its plans to develop and market new drug products and the timing and costs of these development programs; estimates of the size of the markets for the Company’s potential drug products; the outcome of current litigation involving the Company; potential future litigation involving the Company or the validity or enforceability of the intellectual property of the Company; global economic conditions; geopolitical events and regulatory changes; the expectations, development plans and anticipated timelines for the Company’s drug candidates, pipeline and programs, including collaborations with third parties; and the effect of rising interest rates and inflation, economic downturns and recessions, declines in economic activity or global conflicts. These risk factors and others are included from time to time in documents the Company files with the Securities and Exchange Commission, including, but not limited to, its Form 10-Ks, Form 10-Qs and Form 8-Ks, and including the Annual Report on Form 10-K for the year ended December 31, 2022, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, and future SEC filings. These reports and filings are available at www.sec.gov and are available for download, free of charge, soon after such reports are filed with or furnished to the SEC, on the “Investors”, “SEC Filings”, “All SEC Filings” page of our website at www.180lifesciences.com. All subsequent written and oral forward-looking statements concerning the Company, the results of the Company’s clinical trial results and studies or other matters and attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made, including the forward-looking statements included in this press release, which are made only as of the date hereof. The Company cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based, except as otherwise provided by law.
Investors:
Jason Assad
Director of IR
180 Life Sciences Corp
Jassad@180lifesciences.com
FAQ
What is the purpose of the reverse stock split announced by 180 Life Sciences Corp. (ATNF)?
When will the reverse stock split of 180 Life Sciences Corp. (ATNF) become effective?
How many shares will be converted into one share as part of the reverse stock split of 180 Life Sciences Corp. (ATNF)?
What was the final ratio approved by the Board for the reverse stock split of 180 Life Sciences Corp. (ATNF)?
Will the reverse stock split affect all issued and outstanding shares of common stock of 180 Life Sciences Corp. (ATNF)?
