GRI Bio Announces Reverse Stock Split
On June 14, 2024, GRI Bio announced a 1-for-13 reverse stock split, approved by stockholders on June 7, 2024. It will take effect on June 17, 2024, at 4:01 p.m. ET, and GRI's common stock will begin trading on a split-adjusted basis on June 18, 2024, under the ticker 'GRI' with a new CUSIP number 3622AW 304. The split aims to increase the share price to meet Nasdaq's minimum bid price requirement. Post-split, 13 shares will convert into one, reducing outstanding shares from 6,605,271 to around 508,091, while the authorized shares remain unchanged. Fractional shares will be paid in cash. Adjustments will also be made to stock options, warrants, and convertible securities.
- Reverse split will increase the per share trading price, potentially aiding in regaining Nasdaq compliance.
- No action required from stockholders holding shares electronically for post-split adjustments.
- Reduction in outstanding shares from approximately 6,605,271 to 508,091, potentially leading to a higher stock price.
- Proportional adjustments to stock options, warrants, and convertible securities may help maintain value.
- Reverse split indicates potential compliance issues with Nasdaq's minimum bid price requirement.
- Reduced number of shares might not necessarily translate to improved market perception or long-term value.
- Stockholders owning fractional shares will receive cash instead of stock, potentially reducing investor satisfaction.
Insights
The announcement of a 1-for-13 reverse stock split by GRI Bio primarily aims to increase the per share trading price to comply with Nasdaq's minimum bid price requirement. This is a common strategy for companies facing the risk of delisting due to a low stock price. By consolidating shares, the company hopes to avoid being removed from the exchange, which could lead to reduced liquidity and investor confidence.
From a financial perspective, the immediate effect is largely cosmetic; while the share price will rise, the underlying value and market capitalization of the company do not change. It's important to note that while reverse splits can sometimes signal financial distress, they can also be a prelude to other strategic moves, like acquisitions or new product launches, aimed at long-term growth.
For investors, this move could lead to short-term volatility. It's essential to understand that while the stock price may look more attractive post-split, the fundamentals of the company remain unchanged. One should look into the company's financial health and future prospects beyond this event.
Reverse stock splits can sometimes lead to negative investor sentiment because they are often associated with companies that have seen a substantial decline in share price. However, GRI Bio's focus on developing Natural Killer T cell modulators for inflammatory, fibrotic and autoimmune diseases offers a specialized niche in the biotech sector. The adjustment might help regain compliance with exchange requirements, but the actual impact on market perception will depend heavily on upcoming pipeline developments and clinical trial progress.
For retail investors, it’s important to monitor how the market reacts post-split and to pay attention to any forthcoming announcements regarding the company’s product pipeline. If GRI Bio can demonstrate progress or positive outcomes in their trials, it might offset any initial negative sentiment from the reverse split.
While this news should be approached cautiously, understanding the broader context of GRI Bio's strategic goals and clinical progress can provide a more comprehensive view of its potential future trajectory.
The procedural aspects of the reverse stock split involve several technical adjustments, such as changes in the CUSIP number and the conversion of fractional shares into cash payments. These steps are designed to ensure a smooth transition without significant administrative burden on shareholders. The move will not reduce the total number of authorized shares, which may provide the company with more flexibility for future capital raises or stock-based compensation plans.
For retail investors, understanding the legal and procedural nuances can help in comprehending the broader implications of the reverse split. Legal adjustments to stock options, warrants and convertible securities, as well as the handling of fractional shares, are all standard but important to follow closely. While these legal maneuvers ensure compliance and operational smoothness, the core focus should remain on the company's operational and strategic objectives moving forward.
GRI’s common stock is expected to begin trading on a post-split adjusted basis on June 18, 2024
LA JOLLA, CA, June 14, 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-13 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 June 7, 2024. The Reverse Split will legally take effect at 4:01 p.m. Eastern Time, on June 17, 2024. The Company’s common stock will open for trading under a new CUSIP number 3622AW 304 on The Nasdaq Capital Market on June 18, 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-13 Reverse Split will automatically convert every thirteen (13) current shares of the Company’s common stock into one (1) 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 June 17, 2024.
The reverse split will reduce the number of shares of outstanding common stock from approximately 6,605,271 shares, the number of shares outstanding as of June 13, 2024, to approximately 508,091 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 (“NKT”) 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 March 28, 2024 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
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