Salarius Pharmaceuticals Announces 1-for-8 Reverse Stock Split
Salarius Pharmaceuticals (NASDAQ: SLRX) announced a 1-for-8 reverse stock split effective June 14, 2024. Trading on a split-adjusted basis will begin on June 17, 2024. The reverse split aims to regain compliance with the $1.00 minimum closing bid price required by Nasdaq. This move reduces the number of issued and outstanding shares from approximately 4.7 million to about 0.6 million. Stockholders approved the proposal on May 9, 2024. The reverse split will uniformly affect all stockholders without altering ownership percentages, though cash will be given in lieu of fractional shares. The split does not impact the number of authorized shares or their par values. Equiniti Trust Company is the exchange agent for the split.
- The reverse stock split aims to regain compliance with Nasdaq's $1.00 minimum closing bid price requirement.
- The total number of shares will be reduced from 4.7 million to 0.6 million, potentially making the stock more attractive to institutional investors.
- The reverse split will not alter any stockholder’s ownership percentage.
- Equiniti Trust Company will efficiently manage the exchange process for stockholders.
- The reverse stock split can be perceived as a sign of financial distress, possibly impacting investor sentiment negatively.
- Stockholder equity might be diluted due to cash payments in lieu of fractional shares.
- The reverse split follows a period of stock price decline, highlighting possible underlying business challenges.
- Potential liquidity issues might arise as the total number of shares available for trading will significantly decrease.
Insights
The 1-for-8 reverse stock split conducted by Salarius Pharmaceuticals aims to comply with Nasdaq's $1.00 minimum bid price requirement. A reverse stock split consolidates the number of existing shares into fewer, more valuable shares. Post-split, the share count will drop from approximately 4.7 million to 0.6 million. This maneuver is often seen when a company struggles with its stock price, aimed at avoiding delisting.
From a financial perspective, while the reverse split increases the price per share, it doesn't inherently alter the company's valuation or fundamentals. Investors should be wary as reverse splits are frequently used by companies in distress, potentially indicating underlying issues. However, it may also stabilize the stock in the short term by reducing volatility and making shares more attractive to institutional investors who are barred from purchasing stocks below a certain price point. It's important to analyze the company's broader financial health, including revenue streams and debt levels, to gauge the true impact.
The reverse stock split will uniformly affect all shareholders without altering their ownership percentages, except for those holding fractional shares who will receive cash instead. This action is generally neutral in terms of market perception, but it can sometimes signal desperation to the market, potentially leading to a short-term increase in volatility. Future investor sentiment will largely depend on how Salarius executes its strategic goals post-split.
Investors should consider the broader market context and Salarius’s position within it. Market reception to reverse splits can vary; some shareholders may view this as a negative signal, while others might appreciate the effort to maintain Nasdaq listing compliance. Ultimately, the market will respond to Salarius’s ability to advance its clinical trials and achieve FDA approvals, which are critical for the long-term growth of any biopharmaceutical company.
HOUSTON, June 12, 2024 (GLOBE NEWSWIRE) -- Salarius Pharmaceuticals, Inc. (NASDAQ: SLRX), a clinical-stage biopharmaceutical company using protein inhibition and protein degradation to develop cancer therapies for patients in need of new treatment options, today announced that it will effect a 1-for-8 reverse stock split at 5:00 p.m. Eastern Time, on June 14, 2024. Beginning with the opening of trading on June 17, 2024, Salarius’ common stock will trade on the Nasdaq Capital Market on a split-adjusted basis under a new CUSIP number 79400X404 and the Company’s existing trading symbol “SLRX.”
The reverse stock split is intended to enable Salarius to regain compliance with the
At a special meeting of stockholders held on May 9, 2024, Salarius’ stockholders approved the proposal to authorize Salarius’ Board of Directors to file an amendment to Salarius’ amended and restated certificate of incorporation (“Certificate of Incorporation”) to effect the reverse split at a ratio to be determined by the Board, ranging from 1-for-4 to 1-for-8. The specific 1-for-8 ratio was subsequently approved by Salarius’ Board of Directors and the reverse stock split will be effected by filing a Certificate of Amendment to the Certificate of Incorporation with the Secretary of State of the State of Delaware. No further action is required by any stockholders in connection with approving or effecting the reverse stock split.
The reverse split will affect all issued and outstanding shares of Salarius’ common stock. At the effective time of the reverse stock split, the number of shares of common stock issued and outstanding will be reduced from approximately 4.7 million shares to approximately 0.6 million shares. All outstanding options and warrants entitling their holders to purchase shares of Salarius’ common stock will be adjusted as a result of the reverse split, as required by the terms of each security. The number of shares reserved for future issuance pursuant to Salarius’ 2015 Equity Incentive Plan and the number of shares reserved for future issuance pursuant to Salarius’ 2015 Employee Stock Purchase Plan also will be appropriately adjusted. The reverse stock split will affect all stockholders uniformly and will not affect any stockholder's ownership percentage of Salarius’ shares (except to the extent that the reverse stock split would result in some of the stockholders receiving cash in lieu of fractional shares). Stockholders will receive cash in lieu of fractional shares based on the closing price per share of Salarius’ common stock as quoted on the Nasdaq Capital Market on June 14, 2024. The reverse stock split will not reduce the number of authorized shares of common stock or preferred stock or change the par values of Salarius’ common stock (which will remain at
Equiniti Trust Company, LLC, (“Equiniti”) is acting as the exchange agent and transfer agent for the reverse stock split. Equiniti will provide instructions to stockholders with physical certificates regarding the process for exchanging their pre-split stock certificates for post-split shares in book-entry form and receiving payment for any fractional shares.
Additional information about the reverse stock split can be found in the Company’s Definitive Proxy Statement filed with the Securities and Exchange Commission (“SEC”) on March 26, 2024. The Proxy Statement is available at www.sec.gov or at Salarius’ website at salariuspharma.com here.
About Salarius Pharmaceuticals
Salarius Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company developing therapies for patients with cancer in need of new treatment options. Salarius’ product portfolio includes seclidemstat, its lead candidate, which is being studied as a potential treatment for pediatric cancers, sarcomas and other cancers with limited treatment options, and SP-3164, an oral small molecule protein degrader being developed for the treatment of non-Hodgkin’s lymphoma. Salarius has received financial support from the National Pediatric Cancer Foundation to advance the Ewing sarcoma program and was a recipient of a Product Development Award from the Cancer Prevention and Research Institute of Texas (CPRIT). For more information, please visit salariuspharma.com or follow Salarius on Twitter and LinkedIn.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Statements in this press release that are not statements of historical fact are forward-looking statements. Words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “estimate,” “believe,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions are intended to identify forward-looking statements, though not all forward-looking statements contain these identifying words. Forward-looking statements in this press release include statements concerning, among other things, the reverse split and the timing thereof and expectations related thereto; and other statements that are not historical fact.
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. Some factors that may cause the Company’s actual results to differ materially from those expressed or implied in the forward-looking statements in this press release are described under the heading “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the “SEC”), in the Company’s other filings with the SEC, and in the Company’s future reports to be filed with the SEC and available at www.sec.gov. Forward-looking statements contained in this news release are made as of this date. Unless required to do so by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
CONTACT:
LHA Investor Relations
Kim Sutton Golodetz
kgolodetz@lhai.com
212-838-3777
FAQ
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