Seelos Therapeutics Announces 1-for-16 Reverse Stock Split

Rhea-AI Summary

Seelos Therapeutics (Nasdaq: SEEL) has announced a 1-for-16 reverse stock split of its outstanding common shares, effective September 27, 2024. This decision aims to regain compliance with Nasdaq's minimum bid price requirement of $1.00 per share. The company's stock will continue trading under the symbol 'SEEL' with a new CUSIP number. Every 16 existing shares will be combined into one share, reducing the total outstanding shares from approximately 9.2 million to 581 thousand. The reverse split will also apply to outstanding warrants and stock options, with adjustments to exercise prices. No fractional shares will be issued, and any resulting fractions will be rounded up to the nearest whole share.

Positive

• Potential to regain compliance with Nasdaq's minimum bid price requirement
• Maintenance of Nasdaq Capital Market listing

Negative

• Significant reduction in total outstanding shares from 9.2 million to 581 thousand
• Possible investor perception of financial instability due to the need for a reverse split

Insights

Financial Analyst

This reverse stock split is a critical move for Seelos Therapeutics to maintain its Nasdaq listing. By consolidating shares at a 1-for-16 ratio, the company aims to boost its stock price above the $1 minimum bid requirement. While this doesn't change the company's fundamental value, it could impact investor perception and liquidity.

The reduction in outstanding shares from 9.2 million to about 581,000 might increase volatility due to the lower float. However, it's important to note that this action doesn't directly affect the company's market capitalization or operations. The proportional adjustment to warrants and stock options maintains the equity structure integrity.

For investors, this move may be seen as a short-term solution to a deeper issue of maintaining market value. The success of this strategy will depend on Seelos' ability to deliver on its clinical programs and improve its financial position post-split. Shareholders should monitor the stock's performance closely in the coming weeks to gauge market reception.

Legal Expert

The reverse stock split executed by Seelos Therapeutics adheres to regulatory compliance and corporate governance standards. By utilizing Section 78.207 of the Nevada Revised Statutes and filing a Certificate of Change, the company has followed proper legal procedures. This action demonstrates the board's commitment to maintaining Nasdaq listing requirements, which is important for investor access and company credibility.

Importantly, the split affects all common stock equally, including those issuable upon exercise of warrants and options, with proportionate adjustments to exercise prices. This equitable treatment is essential to avoid potential legal challenges from shareholders. The rounding up of fractional shares to the nearest whole share is also a standard practice that prevents the creation of odd lot holders.

While the split itself doesn't raise legal red flags, investors should be aware that frequent reverse splits can sometimes be indicative of underlying financial challenges. It's advisable for shareholders to closely review the company's financial disclosures and future performance to assess long-term viability.

 NEW YORK, Sept. 25, 2024 /PRNewswire/ -- Seelos Therapeutics, Inc. (Nasdaq: SEEL) ("Seelos" or the "Company"), a clinical-stage biopharmaceutical company focused on the development of therapies for central nervous system disorders and rare diseases, today announced that its Board of Directors approved a 1-for-16 reverse stock split of its outstanding shares of common stock, to be effective as of 12:01 a.m. Eastern Time on Friday, September 27, 2024.

The Company's common stock, par value $0.001, will begin trading on a reverse stock split-adjusted basis at the opening of the market on Friday, September 27, 2024. Following the reverse stock split, the Company's common stock will continue to trade on the Nasdaq Capital Market under the symbol "SEEL" with the new CUSIP number, 81577F 406. The reverse stock split is intended for the Company to regain compliance with the minimum bid price requirement of $1.00 per share of common stock for continued listing on the Nasdaq Capital Market. The reverse stock split was approved by the Company's Board of Directors pursuant to Section 78.207 of the Nevada Revised Statutes and was effectuated by the filing of a Certificate of Change with office of the Nevada Secretary of State.

At the effective time of the reverse split, every sixteen (16) issued and outstanding shares of the Company's common stock will be combined automatically into one (1) share of the Company's common stock without any change in the par value per share. No fractional shares will be issued in connection with the reverse stock split, and any fractional shares resulting from the reverse stock split will be rounded up to the nearest whole share. The reverse stock split will reduce the number of authorized shares of the Company's common stock from 50,000,000 shares to 3,125,000 shares and the ownership percentage of each stockholder will remain unchanged other than as a result of the rounding of fractional shares. In addition, the reverse stock split will apply to the Company's common stock issuable upon the exercise of the Company's outstanding warrants and stock options, with proportionate adjustments to be made to the exercise prices thereof and under the Company's equity incentive plans, as applicable.

The reverse stock split will reduce the number of issued and outstanding shares of the Company's common stock from approximately 9.2 million to approximately 581 thousand.

About Seelos Therapeutics:
Seelos Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on the development and advancement of novel therapeutics to address unmet medical needs for the benefit of patients with central nervous system (CNS) disorders and other rare diseases. The Company's robust portfolio includes several late-stage clinical assets targeting indications including Acute Suicidal Ideation and Behavior (ASIB) in Major Depressive Disorder (MDD), amyotrophic lateral sclerosis (ALS) and spinocerebellar ataxia (SCA), as well as early-stage programs in Huntington's disease, Alzheimer's disease, and Parkinson's disease. 

Forward-Looking Statements:
Statements made in this press release, which are not historical in nature, constitute forward-looking statements for purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. These statements include, among others, those regarding the reverse stock split and the timing thereof, the potential impact of the reverse split on the bid price of the Company's common stock, the potential for the Company to regain compliance with the minimum bid price requirement of $1.00 per share of common stock for continued listing on the Nasdaq Capital Market and the expected number of shares of common stock to be outstanding following the reverse stock split. These statements are based on our current expectations and beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The risks and uncertainties involved include those associated with general economic and market conditions, as well as other risk factors and matters set forth in our periodic filings with the SEC, including our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, even if subsequently made available by us on our website or otherwise. We do not undertake any obligation to update, amend or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Contact Information
Anthony Marciano
Chief Communications Officer
Seelos Therapeutics, Inc. (Nasdaq: SEEL)
300 Park Avenue, 2^nd Floor
New York, NY 10022
(646) 293-2136
anthony.marciano@seelostx.com  

Mike Moyer
Managing Director
LifeSci Advisors, LLC
250 West 55th St., Suite 3401
New York, NY 10019
(617) 308-4306
mmoyer@lifesciadvisors.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/seelos-therapeutics-announces-1-for-16-reverse-stock-split-302257773.html

SOURCE Seelos Therapeutics, Inc.

FAQ

What is the reverse stock split ratio announced by Seelos Therapeutics (SEEL)?

Seelos Therapeutics (SEEL) announced a 1-for-16 reverse stock split, effective September 27, 2024.

Why is Seelos Therapeutics (SEEL) implementing a reverse stock split?

Seelos Therapeutics (SEEL) is implementing the reverse stock split to regain compliance with Nasdaq's minimum bid price requirement of $1.00 per share for continued listing on the Nasdaq Capital Market.

How will the reverse split affect Seelos Therapeutics' (SEEL) outstanding shares?

The reverse split will reduce Seelos Therapeutics' (SEEL) outstanding shares from approximately 9.2 million to about 581 thousand.

When will Seelos Therapeutics' (SEEL) reverse stock split take effect?

Seelos Therapeutics' (SEEL) reverse stock split will take effect at 12:01 a.m. Eastern Time on Friday, September 27, 2024.