Azitra, Inc. Announces Reverse Stock Split
Azitra, a clinical-stage biopharmaceutical company, announced a reverse stock split of its common stock at a 1-for-30 ratio.
This change will be effective on July 1, 2024, when the stock will begin trading on a split-adjusted basis under the symbol AZTR. At a special stockholder meeting on June 27, 2024, the Board of Directors was granted the discretion to determine the split ratio, which was finalized at 1-for-30. The split will reduce the number of issued common shares from approximately 28.8 million to 960,155. No fractional shares will be issued; instead, stockholders will receive cash for any fractional shares based on the average closing prices of the common stock over the five days prior to the split.
The new CUSIP number for the split-adjusted shares will be 05479L 203. Stockholders with brokerage accounts will see automatic adjustments, and those holding certificated shares may choose to exchange certificates if desired.
- The reverse stock split will significantly consolidate the number of issued shares from 28.8 million to 960,155, potentially enhancing share value.
- The split does not alter any stockholder's percentage interest in the company, maintaining equity distribution.
- Stockholders may face potential dilution risks if the company issues more shares in the future.
- There may be concerns about the necessity of the reverse stock split, indicating potential underlying financial issues.
Insights
The reverse stock split by Azitra, Inc. at a ratio of 1-for-30 is a significant move that can have diverse implications for stakeholders. A reverse stock split is typically employed by companies to boost the per-share price of their stock, which can be advantageous for several reasons. Firstly, it can help the company meet the minimum share price requirements for continued listing on exchanges such as the NYSE American, where AZTR is traded. This move could prevent the stock from being delisted, which would be a positive outcome for current shareholders.
From a financial perspective, a higher stock price post-split can attract a different class of institutional investors who might avoid stocks trading at very low prices due to various mandates and investment criteria. However, it’s important to recognize that a reverse stock split does not inherently change the company's market capitalization or financial position; it is essentially a cosmetic change unless accompanied by operational improvements or positive business developments.
While the split reduces the number of shares outstanding, which can give an appearance of scarcity and potentially drive demand, retail investors should be cautious. If the underlying issues that caused the decline in share price are not addressed, the stock might continue to underperform post-split. Long-term value creation will depend on Azitra's ability to advance its clinical-stage biopharmaceutical projects effectively and bring successful products to market.
Investors might see a temporary boost in share price due to the reverse split, but they should keep an eye on the company’s fundamentals and strategic milestones in the coming quarters.
Azitra’s decision to execute a reverse stock split can also be analyzed from a market sentiment perspective. Reverse stock splits can sometimes signal to the market that a company is struggling to maintain its share price, which can be perceived negatively by investors. However, the context here is crucial. If the company’s reverse split is part of a broader strategy to stabilize the stock and address structural issues, it can be seen in a more positive light.
Market perception of Azitra post-split will largely depend on upcoming announcements and the company's ability to convey a clear roadmap for future growth. It will be critical for Azitra to communicate effectively with its investors about how this reverse split fits into its strategic vision and how it plans to leverage this move to unlock shareholder value.
In the short term, the market might react with volatility as traders adjust their positions based on the new share structure. Long-term, the company’s ability to deliver on its clinical milestones and product pipeline will determine the sustainability of any post-split price adjustments.
Retail investors should watch for management’s commentary and upcoming quarterly results to gauge the overall health and progress of the company’s initiatives.
Common Stock Will Begin Trading on a Split-Adjusted Basis on July 1, 2024
At a special meeting of stockholders held on June 27, 2024, the Company's stockholders granted the Company's Board of Directors the discretion to effect a reverse stock split of the Company's common stock through an amendment to its Second Amended and Restated Certificate of Incorporation, as amended, at a ratio of not less than 1-for-2 and not more than 1-for-30, with such ratio to be determined by the Company's Board of Directors. Following the stockholders meeting, the Board of Directors of Azitra approved the final split ratio of 1-for-30 and the effective date of July 1, 2024.
At the effective time of the reverse stock split, every 30 shares of the Company's issued common stock will be converted automatically into one issued share of common stock without any change in the par value per share. Stockholders holding shares through a brokerage account will have their shares automatically adjusted to reflect the 1-for-30 reverse stock split. It is not necessary for stockholders holding shares of the Company's common stock in certificated form to exchange their existing stock certificates for new stock certificates of the Company in connection with the reverse stock split, although stockholders may do so if they wish.
The reverse stock split will affect all stockholders uniformly and will not alter any stockholder's percentage interest in the Company's equity, except to the extent that the reverse stock split would result in a stockholder owning a fractional share. No fractional shares of common stock will be issued in connection with the reverse split. Stockholders of record who otherwise would be entitled to receive fractional shares, will be entitled to receive cash (without interest) in lieu of fractional shares, equal to such fraction multiplied by the average of the closing sales prices of the common stock on the NYSE American during regular trading hours for the five consecutive trading days immediately preceding the effective date of the reverse split (with such average closing sales prices being adjusted to give effect to the reverse split).
The reverse stock split will reduce the number of issued shares of the Company's common stock from 28,804,643 shares to approximately 960,155 shares. Proportional adjustments will be made to the number of shares of the Company's common stock issuable upon exercise or conversion of the Company’s equity awards and warrants, as well as the applicable exercise price. Stockholders whose shares are held in brokerage accounts should direct any questions concerning the reverse stock split to their broker. All stockholders of record may direct questions to the Company's transfer agent, VStock Transfer Company, at action@vstocktransfer.com.
Additional information about the reverse stock split can be found in the Company’s definitive proxy statement filed with the Securities and Exchange Commission (the “SEC”) on June 3, 2024, which is available free of charge at the SEC’s website, www.sec.gov, and on the Company’s website at https://ir.azitrainc.com/.
About Azitra, Inc.
Azitra, Inc. is an early-stage clinical biopharmaceutical company focused on developing innovative therapies for precision dermatology using engineered proteins and topical live biotherapeutic products. The Company has built a proprietary platform that includes a microbial library comprised of approximately 1,500 unique bacterial strains that can be screened for unique therapeutic characteristics. The platform is augmented by artificial intelligence and machine learning technology that analyzes, predicts, and helps screen the Company's library of strains for drug like molecules. The Company's initial focus is on the development of genetically engineered strains of Staphylococcus epidermidis, or S. epidermidis, which the Company considers to be an optimal therapeutic candidate species for engineering of dermatologic therapies. For more information, please visit https://azitrainc.com/.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240627507455/en/
Investor Relations Contact:
Norman Staskey
Chief Financial Officer
staskey@azitrainc.com
Hayden IR
James Carbonara
(646) 755-7412
james@haydenir.com
Source: Azitra, Inc.
FAQ
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