Nauticus Robotics Announces Transformative 1-for-36 Reverse Stock Split
Nauticus Robotics (NASDAQ: KITT) has announced a 1-for-36 reverse stock split of its common stock, effective July 22, 2024. This corporate action aims to increase the per-share stock price to comply with Nasdaq's minimum bid price requirements and potentially attract a broader range of investors. The split will consolidate every 36 shares into one, with fractional shares rounded up. Trading on a post-split basis is expected to begin on July 23, 2024, under the same symbol 'KITT' but with a new CUSIP number.
Shareholders' ownership percentages and the company's overall value will remain unchanged. Those holding shares electronically don't need to take action, while those with certificated shares will receive instructions from the transfer agent. This move is part of Nauticus' strategy to maintain its Nasdaq listing and potentially enhance its appeal to institutional investors.
- Potential increase in share price may attract more institutional investors
- Aims to maintain Nasdaq listing by meeting minimum bid price requirements
- No change in shareholders' ownership percentages or company's overall value
- Indicates struggle to maintain minimum share price naturally
- May be perceived as a sign of financial distress by some investors
- Potential short-term market confusion or volatility during the transition
Insights
Reverse stock splits are typically executed by companies to make their stock prices more attractive, particularly to institutional investors and to comply with stock exchange listing requirements. In this case, Nauticus Robotics is performing a 1-for-36 reverse stock split to likely ensure that its stock price remains above the minimum bid price required by the Nasdaq Capital Market.
The immediate impact for retail investors is mainly psychological. While the value of their holdings remains unchanged, the stock price will increase, making it appear more robust. However, it’s important to understand that this is a cosmetic change rather than a fundamental shift. The actual market capitalization of the company remains the same.
Institutional investors might find the new price point more appealing, potentially leading to increased demand and liquidity. However, it's important to monitor how the stock performs post-split. Successful reverse splits can sometimes signal a strategic turnaround, but they can also be a red flag if executed by companies in financial distress.
In the short term, expect some volatility as the market digests the new stock price. Long-term effects will largely depend on Nauticus Robotics' operational performance and any strategic developments that follow.
The 1-for-36 reverse stock split by Nauticus Robotics is primarily aimed at making the stock more attractive to a broader range of investors, particularly those who may have minimum price thresholds. This tactic is not uncommon for companies looking to stabilize their trading activity and ensure compliance with Nasdaq listing requirements.
From a market research perspective, it’s significant to note that reverse splits can sometimes suffer from a stigma. Some investors perceive these actions as a sign that a company is struggling to maintain its stock price. However, this is not always the case, especially if the underlying business fundamentals are strong.
The effectiveness of this strategy will depend on Nauticus Robotics' ability to leverage the increased visibility and potential investor interest to drive future growth. Investors should look out for subsequent company announcements or strategic moves that may indicate a comprehensive plan to improve overall business performance.
It's also noteworthy that reverse stock splits do not alter the company’s fundamentals. Therefore, long-term investors should focus more on Nauticus' operational strategies, market positioning and financial health rather than the immediate changes in stock structure.
Key Information About the Reverse Split
What is a Reverse Split?
A reverse stock split is a corporate action that reduces the number of outstanding shares and proportionately increases the share price. In this case, Nauticus is implementing a 1-for-36 reverse stock split, meaning that every 36 shares of our common stock will be consolidated into one share.
Why is Nauticus enacting the Reverse Split?
By reducing the number of shares, the per-share stock price of Nauticus' common stock should increase proportionally. The primary objective of the Reverse Split is to increase the share price to comply with the minimum bid price required by The Nasdaq Capital Market. A higher share price can also make the stock more attractive to a broader range of investors, including institutional investors who may have minimum price thresholds for investments.
How will the Reverse Split affect current investors?
Every 36 shares of Nauticus common stock held by shareholders will be automatically combined into one share. Fractional shares will be rounded up to the nearest share. This adjustment will not change the ownership of the company or change the overall value of Nauticus, and the share price should be adjusted accordingly. Current shareholders will retain the same percentage ownership in the Company as before the reverse split.
When will the Reverse Split be effective?
The Reverse Split is expected to become effective at 4:01 p.m., Eastern Time, on July 22, 2024. After-market trading of shares in Nauticus' Common Stock may be suspended temporarily at that time. Nauticus expects the Common Stock will begin trading on a post-split basis at the market open on July 23, 2024 under the symbol "KITT" with the new CUSIP number 63911H 207.
Do shareholders need to take any action in connection with the Reverse Split?
Shareholders holding their shares electronically in book-entry form are not required to take any action to receive the post-split shares. Shareholders who hold certificated shares will receive instructions from Continental Stock Transfer and Trust, our transfer agent who is acting as the exchange agent for the Reverse Split.
Where can I find additional information?
Additional information about the Reverse Stock Split can be found in Nauticus' definitive proxy statement (Form DEF 14A) filed with the
Nauticus Robotics, Inc. develops autonomous robots for the ocean industries. Autonomy requires the extensive use of sensors, artificial intelligence, and effective algorithms for perception and decision allowing the robot to adapt to changing environments. The company's business model includes using robotic systems for service, selling vehicles and components, and licensing of related software to both the commercial and defense business sectors. Nauticus has designed and is currently testing and certifying a new generation of vehicles to reduce operational cost and gather data to maintain and operate a wide variety of subsea infrastructure. Besides a standalone service offering and forward-facing products, Nauticus' approach to ocean robotics has also resulted in the development of a range of technology products for retrofit/upgrading traditional ROV operations and other third-party vehicle platforms. Nauticus' services provide customers with the necessary data collection, analytics, and subsea manipulation capabilities to support and maintain assets while reducing their operational footprint, operating cost, and greenhouse gas emissions, to improve offshore health, safety, and environmental exposure.
Cautionary Language Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Act"), and are intended to enjoy the protection of the safe harbor for forward-looking statements provided by the Act as well as protections afforded by other federal securities laws. Such forward-looking statements include but are not limited to: the expected timing of product commercialization or new product releases; customer interest in Nauticus' products; estimated operating results and use of cash; and Nauticus' use of and needs for capital. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events, or results of operations, are forward-looking statements. These statements may be preceded by, followed by, or include the words "believes," "estimates," "expects," "projects," "forecasts," "may," "will," "should," "seeks," "plans," "scheduled," "anticipates," "intends," or "continue" or similar expressions. Forward-looking statements inherently involve risks and uncertainties that may cause actual events, results, or performance to differ materially from those indicated by such statements. These forward-looking statements are based on Nauticus' management's current expectations and beliefs, as well as a number of assumptions concerning future events. There can be no assurance that the events, results, or trends identified in these forward-looking statements will occur or be achieved. Forward-looking statements speak only as of the date they are made, and Nauticus is not under any obligation and expressly disclaims any obligation, to update, alter, or otherwise revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law. Readers should carefully review the statements set forth in the reports which Nauticus has filed or will file from time to time with the Securities and Exchange Commission (the "SEC") for a more complete discussion of the risks and uncertainties facing the Company and that could cause actual outcomes to be materially different from those indicated in the forward-looking statements made by the Company, in particular the sections entitled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in documents filed from time to time with the SEC, including Nauticus' most recent Annual Report on Form 10-K. Should one or more of these risks, uncertainties, or other factors materialize, or should assumptions underlying the forward-looking information or statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated, or expected. The documents filed by Nauticus with the SEC may be obtained free of charge at the SEC's website at www.sec.gov.
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SOURCE Nauticus Robotics, Inc.
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