Hepion Pharmaceuticals Announces Reverse Stock Split

Rhea-AI Summary

Hepion Pharmaceuticals (NASDAQ: HEPA) has announced a 1-for-50 reverse stock split, effective March 17, 2025, at 4:01 p.m. Eastern Time. The company's shares will begin trading on a split-adjusted basis on March 18, 2025, maintaining its NASDAQ symbol 'HEPA' with a new CUSIP number 426897 401.

The reverse split aims to increase the bid price to meet NASDAQ's $1.00 minimum bid requirement for continued listing. This corporate action will reduce outstanding shares from approximately 54.25 million to 1.08 million. Stockholders approved this measure at the annual meeting on March 10, 2025.

The split will automatically combine every 50 shares into one share, with fractional shares rounded up to the next whole share. This action will not affect stockholders' ownership percentages or voting power, except for minimal changes due to fractional share treatment. Proportionate adjustments will be made to stock options, incentive plans, and outstanding warrants.

Positive

• Potential compliance with NASDAQ listing requirements through bid price increase
• No change in stockholders' proportional ownership or voting rights
• Automatic rounding up of fractional shares benefits small stockholders

Negative

• Risk of delisting from NASDAQ if minimum bid price requirement isn't met despite reverse split
• Significant reduction in total outstanding shares may impact stock liquidity
• Indicates underlying share price weakness requiring corporate action

Insights

Financial Analyst

Hepion Pharmaceuticals' announced 1-for-50 reverse split represents a significant defensive financial maneuver aimed at regaining Nasdaq compliance. With shares trading at just $0.0378, the company is far below the $1.00 minimum bid requirement, risking delisting from the Nasdaq Capital Market.

The extreme ratio of this reverse split is particularly concerning. Most companies implement more modest splits (1-for-5 or 1-for-10), making this 1-for-50 consolidation an indicator of severe underlying financial stress. The mathematics are straightforward: the post-split price should theoretically reach $1.89, providing a thin cushion above the compliance threshold.

However, history shows that companies implementing such dramatic splits typically experience continued downward pressure on their share price. The reduction from 54.25 million to approximately 1.08 million shares doesn't alter Hepion's tiny $1.2 million market capitalization - an alarmingly small valuation for a clinical-stage biopharmaceutical company developing treatments for serious conditions like NASH and hepatocellular carcinoma.

For existing shareholders, while ownership percentages technically remain unchanged, the psychological impact and market perception of such desperate measures often trigger additional selling pressure. The float post-split will likely result in increased volatility and wider bid-ask spreads, creating additional challenges for investors. This extreme corporate action suggests Hepion faces fundamental financial constraints that may impact its ability to advance its clinical programs.

Shares Expected to Begin Trading on Split-Adjusted Basis on March 18, 2025

MORRISTOWN, N.J., March 14, 2025 (GLOBE NEWSWIRE) -- Hepion Pharmaceuticals, Inc. (NASDAQ: HEPA), a clinical stage biopharmaceutical company that has been developing a treatment for non-alcoholic steatohepatitis (“NASH”), hepatocellular carcinoma (“HCC”), and other chronic liver diseases, today announced that it will implement a 1-for-50 reverse split of the issued shares of its common stock, effective at 4:01 p.m. Eastern Time on March 17, 2025. The Company's common stock is expected to begin trading on a split-adjusted basis when the market opens on March 18, 2025, and will continue to trade on The Nasdaq Capital Market under the symbol “HEPA.” The new CUSIP number for the common stock will be 426897 401.

The reverse stock split is intended to increase the bid price of the common stock to enable the Company to regain compliance with the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market. The Company’s stockholders authorized the reverse stock split at the Company’s annual meeting of stockholders held on March 10, 2025.

When the reverse stock split becomes effective, every 50 shares of the Company’s common stock issued and outstanding or held by the Company in treasury will automatically be combined and reclassified into one share of common stock. No fractional shares will be issued as a result of the reverse stock split. Stockholders who would otherwise be entitled to receive a fractional share will instead automatically have their fractional interests rounded up to the next whole share, after aggregating all the fractional interests of a holder resulting from the reverse stock split. The reverse stock split will affect all stockholders uniformly and will not change any stockholder’s percentage ownership interest or any stockholder’s proportionate voting power, except for immaterial changes that may result from the treatment of fractional shares. The reverse stock split will not change the number of authorized shares of the Company’s common stock or the par value per share of the Company’s common stock.

The reverse stock split will reduce the number of issued and outstanding shares of the Company’s common stock from approximately 54.25 million to approximately 1.08 million.

As a result of the reverse stock split, proportionate adjustments will be made to the per share exercise prices of, and the number of shares underlying, the Company’s outstanding stock options, as well as to the number of shares available for future awards granted under the Company’s stock incentive plans. In addition, proportionate adjustments will be made to the per share exercise prices of, and the number of shares underlying, outstanding warrants to purchase shares of the Company’s common stock.

The combination of, and reduction in, the issued shares of common stock as a result of the reverse stock split will occur automatically at the effective time of the reverse stock split without any additional action on the part of the Company’s stockholders. The Company's transfer agent, Pacific Stock Transfer Company, is acting as the exchange agent for the reverse stock split and will send stockholders of record holding their shares electronically in book-entry form a transaction notice indicating the number of shares of common stock held after the reverse stock split. Stockholders who hold their shares through a broker, bank, or other nominee will have their positions adjusted to reflect the reverse stock split, subject to their broker, bank, or other nominee’s particular processes, and are not expected to be required to take any action in connection with the reverse stock split.

Additional information regarding the reverse stock split can be found in the Company’s definitive proxy statement for the annual meeting of stockholders of the Company held on March 10, 2025, which was filed with the U.S. Securities and Exchange Commission on February 7, 2025, a copy of which is available at www.sec.gov and on the Company's website.

About Hepion Pharmaceuticals

Hepion’s primary asset, Rencofilstat, is a potent inhibitor of cyclophilins, which are involved in many disease processes. Rencofilstat has been shown to reduce liver fibrosis and hepatocellular carcinoma tumor burden in experimental disease models. In November 2021, the U.S. Food and Drug Administration (“FDA”) granted Fast Track designation for rencofilstat for the treatment of NASH. That was followed in June 2022 by the FDA’s granting of Orphan Drug designation to rencofilstat for the treatment of HCC.

In April 2024, Hepion announced that it was winding down its ASCEND-NASH clinical trial. This trial was designed as a Phase 2b, randomized, multi-center, double-blinded study with first patient screened in August 2022, to evaluate the safety and efficacy of Rencofilstat dosed for 12 months, with a target enrollment of 336 subjects. Enrollment was paused in April 2023, with 151 subjects randomized. To date, approximately 80 subjects have completed their Day 365 visits and are evaluable for both safety and efficacy. An additional 40 subjects will provide significant safety data for evaluation. These patients will be added to Hepion’s existing safety database.

Forward-Looking Statements

The Company cautions you that all statements, other than statements of historical facts, contained in this press release, are forward-looking statements. Forward-looking statements, in some cases, can be identified by terms such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” “contemplate,” “project,” “target,” “objective,” or the negative version of these words and similar expressions. In this press release, forward-looking statements include, but are not limited to, statements relating to the timing, completion and effect of the reverse stock split and the Company’s ability to regain compliance with Nasdaq’s minimum bid price requirement and continue to have its common stock listed on The Nasdaq Capital Market. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by the forward-looking statements in this press release, including, without limitation, the risk that Nasdaq may not process the reverse stock split on the expected timeline; the risk that after the reverse stock split the closing bid price of the Company’s common stock is not at least $1.00 per share for a minimum of ten consecutive trading sessions; the potential for Nasdaq to suspend trading in or to delist the Company’s common stock. Forward-looking statements are based upon the Company’s current expectations and involve assumptions that may never materialize or may prove to be incorrect. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. For a detailed description of risks and uncertainties the Company faces, you are encouraged to review the documents the Company files with the SEC including the Company’s recent filings on Form 8-K, Form 10-K and Form 10-Q. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they were made. The Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.

For further information, please contact:
Hepion Pharmaceuticals
info@hepionpharma.com

FAQ

What is the ratio of Hepion Pharmaceuticals' (HEPA) reverse stock split announced for March 2025?

Hepion Pharmaceuticals announced a 1-for-50 reverse stock split, meaning every 50 shares will be combined into one share.

When will HEPA's reverse stock split take effect and begin trading?

The split takes effect March 17, 2025, at 4:01 p.m. ET, with split-adjusted trading beginning March 18, 2025.

How many shares will HEPA have outstanding after the March 2025 reverse split?

The outstanding shares will reduce from approximately 54.25 million to 1.08 million after the reverse split.

Why is Hepion Pharmaceuticals (HEPA) implementing a reverse stock split in March 2025?

The reverse split aims to increase the bid price to meet NASDAQ's $1.00 minimum bid requirement for continued listing.

How will HEPA's reverse stock split affect existing shareholders' ownership percentages?

The split will not change stockholders' ownership percentages or voting power, except for minimal changes from fractional share rounding.