GRI Bio Announces Reverse Stock Split
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Insights
The announcement of GRI Bio's 1-for-7 reverse stock split is a strategic move aimed at addressing the company's compliance with Nasdaq's minimum bid price requirement. This action suggests a proactive approach to maintaining its listing status, which can be seen as a positive signal to investors. The reduction in outstanding shares from around 4.52 million to approximately 645,736 shares will likely lead to an increased per share price, albeit without changing the company's market capitalization.
However, such corporate actions are often met with mixed reactions from the market. While a reverse split can help avoid delisting, it may also be perceived as a sign of underlying financial weakness, potentially leading to negative investor sentiment. It's important to monitor the stock's performance post-split to gauge the market's reception of this move.
For existing shareholders, the adjustment in holdings will be automatic and the provision for cash payment in lieu of fractional shares ensures that they are compensated fairly. The proportional adjustments to stock options, warrants and convertible securities are standard practice and maintain the rights of those securities holders relative to their pre-split positions.
In the biotechnology sector, maintaining a listing on a major exchange like Nasdaq is crucial for visibility and access to capital. A reverse stock split can be a double-edged sword; it may improve the stock's marketability by appealing to institutional investors who might avoid lower-priced stocks, but it can also deter some retail investors who perceive the move as an attempt to artificially inflate stock prices.
The long-term impact of the reverse split will largely depend on GRI Bio's ability to leverage this structural change to attract new investment and advance its Natural Killer T (NKT) cell modulators pipeline. The company's focus on inflammatory, fibrotic and autoimmune diseases taps into a significant market with unmet medical needs, which could drive future growth if their pipeline shows promising clinical results.
From a legal standpoint, the reverse stock split follows a formal process, including approval by the board of directors and the company's shareholders, which reflects proper corporate governance. The timing of the legal effect of the reverse split, set for just after market close, is designed to minimize disruption to trading. It's also noteworthy that the company has engaged a transfer agent to facilitate the exchange of physical stock certificates, ensuring that shareholders' rights are preserved during this transition.
The adherence to regulatory requirements and transparent communication with stockholders are essential to maintain investor trust during such corporate actions. The company's detailed explanation of the procedural aspects, including adjustments to convertible securities and the handling of fractional shares, demonstrates a commitment to regulatory compliance and shareholder fairness.
GRI’s common stock is expected to begin trading on a post-split adjusted basis on January 30, 2024
LA JOLLA, CA, Jan. 26, 2024 (GLOBE NEWSWIRE) -- GRI Bio, Inc. (NASDAQ: GRI) (“GRI Bio” or the “Company”), a biotechnology company advancing an innovative pipeline of Natural Killer T (“NKT”) cell modulators for the treatment of inflammatory, fibrotic and autoimmune diseases, today announced that the board of directors of the Company approved a 1-for-7 reverse stock split (the “Reverse Split”) of the Company’s common stock. The Reverse Split was approved by the stockholders of the Company at a special meeting of the Company held on January 19, 2024. The Reverse Split will legally take effect at 4:01 p.m. Eastern Time, on January 29, 2023. The Company’s common stock will open for trading under a new CUSIP number 3622AW 205 on The Nasdaq Capital Market on January 30, 2024, on a split-adjusted basis under the current ticker symbol “GRI.” The Reverse Split is intended to increase the per share trading price of the Company’s common stock to enable the Company to regain compliance with the minimum bid price requirement for continued listing on The Nasdaq Capital Market.
The 1-for-7 Reverse Split will automatically convert every 7 current shares of the Company’s common stock into one share of common stock. No fractional shares will be issued in connection with the reverse stock split. Stockholders who would otherwise hold a fractional share of the Company’s common stock following the reverse stock split will receive a cash payment in lieu thereof at a price equal to that fractional share to which the stockholder would otherwise be entitled multiplied by the closing sale price of the common stock on The Nasdaq Capital Market, as adjusted for the reverse stock split, on January 29, 2024.
The reverse split will reduce the number of shares of outstanding common stock from approximately 4,520,233 shares, the number of shares outstanding as of January 22, 2024, to approximately 645,736 shares. The total authorized number of shares will not be reduced. Proportional adjustments will also be made to the exercise and conversion prices of the Company’s outstanding stock options, warrants, and convertible securities, and to the number of shares issued and issuable under the Company’s stock incentive plans.
Stockholders holding their shares electronically in book-entry form are not required to take any action to receive post-split shares. Stockholders owning shares through a bank, broker, or other nominee will have their positions automatically adjusted to reflect the reverse stock split, subject to brokers’ particular processes, and will not be required to take any action in connection with the reverse stock split. For those stockholders holding physical stock certificates, the Company’s transfer agent, Broadridge Corporate Issuers Solutions, Inc., will send instructions for exchanging those certificates for shares held electronically in book-entry form or for new certificates, in either case representing the post-split number of shares, and any payments in cash in lieu of fractional shares, if applicable.
About GRI Bio, Inc.
GRI Bio is a clinical-stage biopharmaceutical company focused on fundamentally changing the way inflammatory, fibrotic and autoimmune diseases are treated. GRI Bio’s therapies are designed to target the activity of Natural Killer T cells, which are key regulators earlier in the inflammatory cascade, to interrupt disease progression and restore the immune system to homeostasis. NKT cells are innate-like T cells that share properties of both NK and T cells and are a functional link between the innate and adaptive immune responses. Type I invariant NKT (“iNKT”) cells play a critical role in propagating the injury, inflammatory response, and fibrosis observed in inflammatory and fibrotic indications. GRI Bio’s lead program, GRI-0621, is an inhibitor of iNKT cell activity and is being developed as a novel oral therapeutic for the treatment of idiopathic pulmonary fibrosis, a serious disease with significant unmet need. The Company is also developing a pipeline of novel type 2 NKT agonists for the treatment of systemic lupus erythematosus. Additionally, with a library of over 500 proprietary compounds, GRI Bio has the ability to fuel a growing pipeline.
Forward Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “contemplate,” “could,” “estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “target,” “aim,” “should,” “will,” “would,” or the negative of these words or other similar expressions. These forward-looking statements are based on the Company’s current beliefs and expectations. Forward-looking statements include, but are not limited to, statements regarding: the timing and effectiveness of the Reverse Split; the Company’s ability to regain compliance with the Nasdaq minimum bid price and other listing requirements; the Company’s expectations with respect to development and commercialization of the Company’s product candidates; the timing of initiation or completion of clinical trials and availability of resulting data, the potential benefits and impact of the Company’s clinical trials and product candidates and any implication that the data or results observed in preclinical trials or earlier studies or trials will be indicative of results of later studies or clinical trials. Actual results may differ from the forward-looking statements expressed by the Company in this press release and consequently, you should not rely on these forward-looking statements as predictions of future events. These forward-looking statements are subject to inherent uncertainties, risks and assumptions that are difficult to predict, including, without limitation: (1) the inability to maintain the listing of the Company’s common stock on Nasdaq and to comply with applicable listing requirements; (2) changes in applicable laws or regulations; (3) the inability of the Company to raise financing in the future; (4) the success, cost and timing of the Company’s product development activities; (5) the inability of the Company to obtain and maintain regulatory clearance or approval for its respective products, and any related restrictions and limitations of any cleared or approved product; (6) the inability of the Company to identify, in-license or acquire additional technology; (7) the inability of the Company to compete with other companies currently marketing or engaged in the development of products and services that the Company is currently developing; (8) the size and growth potential of the markets for the Company’s products and services, and their respective ability to serve those markets, either alone or in partnership with others; (9) the failure to achieve any milestones or receive any milestone payments under any agreements; (10) inaccuracy in the Company’s estimates regarding expenses, future revenue, capital requirements and needs for and the ability to obtain additional financing; (11) the Company’s ability to protect and enforce its intellectual property portfolio, including any newly issued patents; and (12) other risks and uncertainties indicated from time to time in the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including the risks and uncertainties described in the “Risk Factors” section of the Company’s most recent Annual Report on Form 10-K filed with the SEC on February 24, 2023 and subsequently filed reports. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.
Investor Contact:
JTC Team, LLC
Jenene Thomas
(833) 475-8247
GRI@jtcir.com
FAQ
What is the purpose of the reverse stock split announced by GRI Bio, Inc.?
What will be the new CUSIP number for GRI Bio, Inc. following the reverse stock split?
How many shares will be outstanding after the reverse stock split?
What will happen to stock options, warrants, and convertible securities after the reverse stock split?
Do stockholders holding their shares electronically need to take any action to receive post-split shares?
