Portage Biotech Announces 1-for-20 Reverse Stock Split

Rhea-AI Summary

Portage Biotech (NASDAQ: PRTG) has announced a 1-for-20 reverse stock split of its ordinary shares, effective August 15, 2024. This strategic move aims to increase the per-share trading price and ensure compliance with Nasdaq's minimum $1.00 bid price requirement for continued listing. The split will convert every 20 pre-split shares into 1 post-split share, with fractional shares rounded up. Trading will continue under the symbol 'PRTG' with a new CUSIP number.

The reverse split will uniformly affect all shareholders, maintaining their percentage interest in the company, except for minor adjustments due to fractional shares. Outstanding options, warrants, and equity incentive plans will be adjusted accordingly. Notably, the number of authorized shares remains unlimited under British Virgin Islands law.

Positive

• Aims to maintain Nasdaq listing compliance
• Potential increase in share price attractiveness to investors

Negative

• Indicates previous inability to maintain minimum share price
• May signal financial challenges or market perception issues

Financial Analyst

The 1-for-20 reverse stock split is a critical move for Portage Biotech to maintain its Nasdaq listing. This action will artificially boost the share price, potentially above the $1 minimum bid requirement. However, it's important to note that this doesn't change the company's underlying value or market capitalization. Investors should be cautious, as reverse splits are often seen as a red flag, indicating financial distress or lack of market confidence. The move could attract short-term speculative trading but may not address long-term fundamental issues. Shareholders will see their total number of shares decrease, but the value should theoretically remain the same. This could impact liquidity and potentially increase volatility in the short term.

Market Research Analyst

Portage Biotech's reverse split reflects broader trends in the biotech sector, where many smaller companies struggle to maintain Nasdaq listings amid challenging market conditions. This move might temporarily solve the listing issue but doesn't address underlying challenges in the immuno-oncology space. Investor sentiment towards such actions is generally negative, often leading to increased scrutiny and potential sell-offs. However, if Portage can leverage this opportunity to refocus investor attention on its clinical-stage pipeline and novel therapies, it might mitigate some negative perceptions. The key will be demonstrating tangible progress in their multi-targeted therapies and securing partnerships or funding to advance clinical trials.

Legal Expert

From a legal standpoint, Portage Biotech's reverse split adheres to regulatory requirements for maintaining Nasdaq listing. The company has properly disclosed the details, including the treatment of fractional shares and adjustments to outstanding securities. It's noteworthy that Portage, incorporated in the British Virgin Islands, has unlimited authorized shares, which differs from many U.S. corporations. This could provide flexibility for future capital raises but may also concern some investors about potential dilution. Shareholders should review their rights and any changes to voting power. While the split itself doesn't trigger legal issues, the company must ensure ongoing compliance with Nasdaq rules and SEC regulations to avoid future delisting risks.

WESTPORT, Conn., Aug. 13, 2024 (GLOBE NEWSWIRE) -- Portage Biotech Inc. (“Portage” or the “Company”) (NASDAQ: PRTG), a clinical-stage immuno-oncology company with a portfolio of novel multi-targeted therapies for use as monotherapy and in combination, today announced that the Company’s Board of Directors approved a reverse stock split of its ordinary shares at a ratio of 1-for-20. Beginning with the opening of trading on August 15, 2024, Portage’s ordinary shares are expected to begin trading on The Nasdaq Capital Market on a split-adjusted basis under the existing trading symbol “PRTG” and new CUSIP number G7185A136.

The reverse stock split is being implemented to increase the per share trading price of the Company’s ordinary shares for the purpose of ensuring a share price high enough to comply with the minimum $1.00 bid price requirement for continued listing on The Nasdaq Capital Market.

As a result of the reverse stock split, every twenty (20) pre-split ordinary shares will be converted into one (1) post-split ordinary share. Any fractional shares resulting from the reverse stock split will be rounded up to the nearest whole post-split ordinary share. The reverse stock split affects all shareholders uniformly and will not alter any shareholder’s percentage interest in the Company’s ordinary shares, except for adjustments that may result from the treatment of fractional shares. All outstanding options and warrants entitling their holders to purchase the Company’s ordinary shares will be adjusted as a result of the reverse stock split, in accordance with the terms of each such security. In addition, the number of ordinary shares reserved for future issuance pursuant to the Company’s equity incentive plans will also be appropriately adjusted. The number of authorized ordinary shares will not be proportionately reduced because the Company has an unlimited number of authorized ordinary shares available for issuance, as permitted under the laws of the British Virgin Islands.

Portage’s transfer agent, TSX Trust Company, which is also acting as the exchange agent for the reverse stock split, will provide instructions to shareholders regarding the process for exchanging any share certificates.

About Portage Biotech Inc.        
Portage is a clinical-stage immuno-oncology company advancing multi-targeted therapies to extend survival and significantly improve the lives of patients with cancer. The Company has made the decision to discontinue its sponsored trial for its the invariant natural killer T-cell (iNKT) program and pause patient enrollment to its sponsored adenosine trial program (ADPORT-601 trial) for its potentially best-in-class adenosine antagonists PORT-6 (adenosine 2A inhibitor) and PORT-7 (adenosine 2B inhibitor). The Company is exploring strategic alternatives, which may include finding a partner for one or more of its assets, a sale of the company, a merger, restructurings, both in and out of court, a company wind down, further financing efforts or other strategic action. For more information, please visit www.portagebiotech.com, follow us on Twitter at @PortageBiotech or find us on LinkedIn at Portage Biotech Inc.

Forward-Looking Statements
All statements in this news release, other than statements of historical facts, including without limitation, statements regarding about the Company’s information that are forward-looking in nature and, business strategy, plans and objectives of management for future operations and those statements preceded by, followed by or that otherwise include the words "believe," "expects," "anticipates," "intends," "estimates," “will,” “may,” “plan,” “potential,” “continue,” or similar expressions or variations on such expressions are forward-looking statements. For example, statements regarding the reverse stock split and the timing thereof and expectations related thereto, and compliance with the minimum bid price requirement are forward-looking statements. The Company may not actually achieve the plans, intentions or expectations disclosed in the forward-looking statements and you should not place undue reliance on the forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause the Company’s actual results to differ materially from the results described in or implied by the forward-looking statements. Factors that may cause the Company’s actual results to differ materially from those expressed or implied in the forward-looking statements in this news release are described in “Item 3 - Key Information-Risk Factors” in the Company’s Annual Report on Form 20-F for the year ended March 31, 2023. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, undue reliance should not be placed on them as actual results may differ materially from these forward-looking statements. The forward-looking statements contained in this news release are made as of the date hereof, and the Company undertakes no obligation to update publicly or revise any forward-looking statements or information, except as required by law.

FOR MORE INFORMATION, PLEASE CONTACT:
Investor Relations:
ir@portagebiotech.com

Media Relations:
media@portagebiotech.com

FAQ

When will Portage Biotech's 1-for-20 reverse stock split take effect?

Portage Biotech's 1-for-20 reverse stock split is expected to take effect at the opening of trading on August 15, 2024.

What is the new CUSIP number for Portage Biotech (PRTG) after the reverse split?

The new CUSIP number for Portage Biotech (PRTG) after the reverse split is G7185A136.

How will the reverse split affect Portage Biotech (PRTG) shareholders?

The reverse split will convert every 20 pre-split shares into 1 post-split share. Shareholders' percentage interest in the company will remain unchanged, except for minor adjustments due to fractional shares being rounded up.

Why is Portage Biotech (PRTG) implementing a reverse stock split?

Portage Biotech is implementing the reverse stock split to increase its per-share trading price and comply with Nasdaq's minimum $1.00 bid price requirement for continued listing.