Seelos Therapeutics Announces 1-for-8 Reverse Stock Split

Rhea-AI Summary

Seelos Therapeutics announced a 1-for-8 reverse stock split of its common stock, effective May 16, 2024. The stock will trade under the symbol 'SEEL' with a new CUSIP number, 81577F307. This move aims to regain compliance with Nasdaq's minimum bid price requirement of $1.00 per share. The split will reduce authorized shares from 400 million to 50 million and outstanding shares from 17.4 million to 2.2 million. Stockholders' ownership percentages will remain unchanged except for fractional share adjustments, which will be rounded up.

Positive

• Reverse stock split aims to regain compliance with Nasdaq's $1.00 minimum bid price requirement.
• Post-split, the reduced number of shares will be about 2.2 million, potentially increasing the share price.
• Stockholders' ownership percentages remain unchanged, avoiding dilution except for fractional rounding.

Negative

• Reverse stock splits can signal financial instability and might concern investors.
• The reduction from 17.4 million to 2.2 million shares could lead to volatility in stock prices.
• Potential investor concern over the need to meet Nasdaq compliance requirements.

Insights

Financial Analyst

The announced 1-for-8 reverse stock split by Seelos Therapeutics is a strategic move primarily aimed at regaining compliance with Nasdaq's minimum bid price requirement of $1.00 per share. This maneuver is often undertaken by companies whose stock price has fallen below required thresholds to avoid delisting. By consolidating shares, Seelos aims to boost its per-share price, making it more appealing to institutional investors and maintaining its listing status.

However, reverse stock splits don't directly affect a company's market capitalization, as the reduction in the number of shares is offset by an increase in the share price. The impact on retail investors can vary. While some may view it as a sign of financial instability or potential dilution, others might see it as a necessary step to stabilize the company and enable future growth. Investors should monitor the company's fundamentals and upcoming financial results to gauge the long-term effectiveness of this move.

Market Research Analyst

From a market perspective, the reverse stock split reduces the total number of shares from about 17.4 million to roughly 2.2 million. This can create a perception of reduced supply, potentially increasing demand for the stock if investor sentiment is positive. Additionally, the new CUSIP number and adjusted trading basis post-split are procedural, yet important for ensuring accurate trading and record-keeping.

Retail investors should note that while no fractional shares will be issued and rounded up to the nearest whole share, the actual ownership percentage remains unchanged. This measure is purely administrative and does not inherently add value to the stock. The key here is to assess how the market reacts post-split and whether the company can leverage this move to improve its financial health and operational outlook.

NEW YORK, May 14, 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-8 reverse stock split of its outstanding shares of common stock, to be effective as of 12:01 a.m. Eastern Time on Thursday, May 16, 2024.

The Company's common stock will begin trading on a reverse stock split-adjusted basis at the opening of the market on Thursday, May 16, 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, 81577F307. 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.

At the effective time of the reverse split, every 8 issued and outstanding shares of the Company's common stock will be converted automatically into one 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 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 400,000,000 shares to 50,000,000 shares and the ownership percentage of each stockholder will remain unchanged other than as a result 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 17.4 million to approximately 2.2 million.

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

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SOURCE Seelos Therapeutics, Inc.

FAQ

What is the effective date for Seelos Therapeutics' reverse stock split?

The reverse stock split will be effective as of 12:01 a.m. Eastern Time on May 16, 2024.

What will Seelos Therapeutics' new CUSIP number be after the reverse stock split?

The new CUSIP number will be 81577F307.

How many shares will Seelos Therapeutics have outstanding after the reverse stock split?

The number of outstanding shares will be reduced from approximately 17.4 million to 2.2 million.

Why is Seelos Therapeutics conducting a reverse stock split?

The reverse stock split is intended to regain compliance with Nasdaq's minimum bid price requirement of $1.00 per share.