TCBP Announces Plan to Implement ADS Ratio Change

Rhea-AI Summary

TC BioPharm (NASDAQ: TCBP) has announced a significant change in its American Depositary Shares (ADS) ratio. Effective August 5th, 2024, the company will adjust its ADS to ordinary shares ratio from 1:20 to 1:200. This change will function similarly to a 1-for-10 reverse ADS split for ADS holders. Key points:

- No impact on underlying ordinary shares
- ADS holders must exchange every 10 ADSs for 1 new ADS
- Fractional new ADSs will be sold, with proceeds distributed to holders
- Trading continues on Nasdaq under 'TCBP' symbol
- ADS trading price expected to increase proportionally, though not guaranteed

This strategic move aims to adjust TCBP's market presence, potentially affecting its stock valuation and investor perception.

Positive

• Potential increase in ADS trading price, which could improve market perception
• Continued listing on Nasdaq Capital Market, maintaining visibility and liquidity

Negative

• Reduction in the number of ADSs held by investors, which may be perceived negatively
• Potential loss for investors due to the sale of fractional ADS entitlements
• Uncertainty regarding the proportional increase in ADS trading price post-ratio change

Insights

Financial Analyst

TC BioPharm's announcement of an ADS ratio change is a significant development that warrants close attention from investors. This move, effectively a 1-for-10 reverse ADS split, is often implemented by companies facing challenges in maintaining their stock price above certain thresholds, particularly the $1 minimum bid price required for continued listing on the Nasdaq.

While the company states that this change will have no impact on underlying ordinary shares, it's important to understand the potential implications:

• The reduced number of ADSs in circulation could potentially increase volatility in the stock price.
• This move might be seen as a temporary solution to compliance issues rather than addressing fundamental business challenges.
• Investors should be aware that reverse splits often carry a negative market perception, as they're frequently associated with struggling companies.

It's worth noting that the company doesn't provide a clear rationale for this action in their announcement. This lack of transparency could raise questions among investors about the company's current financial health and future prospects. Shareholders should closely monitor upcoming financial reports and any further corporate communications for a more comprehensive understanding of TC BioPharm's strategic direction.

Market Research Analyst

The ADS ratio change announced by TC BioPharm is a strategic move that deserves careful consideration. Here are some key points for investors to ponder:

• This action could be viewed as a defensive measure to maintain Nasdaq listing compliance, which requires a minimum bid price of $1 per share.
• While the company expects the ADS trading price to increase proportionally, there's no guarantee this will occur or be sustained.
• Historical data shows that many companies implementing reverse splits often experience continued downward pressure on their stock price post-split.

It's important to understand that this move doesn't change the fundamental value of the company. However, it could impact market perception and trading dynamics. Investors should consider:

• The potential for increased short-term volatility as the market adjusts to the new ADS structure.
• The possibility of reduced liquidity, which could affect ease of trading.
• The need to reassess any existing price targets or valuation models in light of the new ADS ratio.

While this move buys TC BioPharm some time, it's essential for investors to look beyond this technical adjustment and focus on the company's underlying business performance, pipeline progress and financial health to make informed investment decisions.

EDINBURGH, Scotland, July 31, 2024 /PRNewswire/ -- TC BioPharm (Holdings) PLC ("TC BioPharm" or the "Company") (NASDAQ: TCBP) a clinical stage biotechnology company developing platform allogeneic gamma-delta T cell therapies for cancer and other indications, today announced that it will change its ratio of its American Depositary Shares ("ADSs") to ordinary shares from one (1) ADS representing twenty (20) ordinary shares to one ADS representing two hundred (200) ordinary shares (the "ADS Ratio Change"). The ADS Ratio Change is expected to become effective on August 5th, 2024, U.S. Eastern Time.

For the ADS holders, the ADS Ratio Change will have the same effect as a one-for-10 reverse ADS split. The ADS Ratio Change will have no impact on the Company's underlying ordinary shares, and no ordinary shares will be issued or cancelled in connection with the ADS Ratio Change. 

On the Effective Date, holders of the ADSs will be required to surrender and exchange every ten (10) ADSs then held for one (1) new ADS. The Bank of New York Mellon, as the depositary bank for the Company's ADS program (the "Depositary"), will arrange for the exchange. The ADSs will continue to be traded on Nasdaq Capital Market under the symbol "TCBP."

No fractional new ADSs will be issued in connection with the change in the ADS ratio. Instead, fractional entitlements to new ADSs will be aggregated and sold by the Depositary and the net cash proceeds from the sale of the fractional ADS entitlements (after deduction of fees, taxes and expenses) will be distributed to the applicable ADS holders by the Depositary.

As a result of the ADS Ratio Change, the ADS trading price is expected to increase proportionally, although the Company can give no assurance that the ADS trading price after the ADS Ratio Change will be proportionally equal to or greater than the previous' ADS trading price prior to the change.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this Current Report on Form 8-K that do not relate to matters of historical fact should be considered forward-looking statements, including without limitation statements regarding the Company's intent or ability to affect any budget savings or execute on any M&A or capital raising strategy. These statements are based on management's current assumptions and are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. For other important factors that could cause actual results to differ materially from the forward-looking statements in this press release, please see the risks and uncertainties identified under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023, and our other reports filed with the SEC, all of which is available on the Company's Investor Relations website at www.tcbiopharm.com and on the SEC website at www.sec.gov. All forward-looking statements reflect the Company's beliefs and assumptions only as of the date of this press release. The Company undertakes no obligation to update forward-looking statements to reflect future events or circumstances.

About TC BioPharm (Holdings) PLC

TC BioPharm is a clinical-stage biopharmaceutical company focused on the discovery, development and commercialization of gamma-delta T cell therapies for the treatment of cancer with human efficacy data in acute myeloid leukemia. Gamma-delta T cells are naturally occurring immune cells that embody properties of both the innate and adaptive immune systems and can intrinsically differentiate between healthy and diseased tissue.

TC BioPharm is the leader in developing gamma-delta T cell therapies, and the first company to conduct phase II/pivotal clinical studies in oncology. The Company is conducting two investigator-initiated clinical trials for its unmodified gamma-delta T cell product line - Phase 2b/3 pivotal trial in treatment of acute myeloid leukemia using the Company's proprietary allogeneic CryoTC technology to provide frozen product to clinics worldwide.

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SOURCE TC BioPharm

FAQ

What is the new ADS ratio for TC BioPharm (TCBP) and when does it take effect?

TC BioPharm (TCBP) is changing its ADS ratio from 1 ADS representing 20 ordinary shares to 1 ADS representing 200 ordinary shares. This change will take effect on August 5th, 2024, U.S. Eastern Time.

How will the ADS ratio change affect TCBP shareholders?

For ADS holders, the ratio change will have the same effect as a one-for-10 reverse ADS split. Holders will need to surrender and exchange every 10 ADSs for 1 new ADS. The change does not affect underlying ordinary shares.

Will TCBP's stock symbol change after the ADS ratio adjustment?

No, TC BioPharm's ADSs will continue to trade on the Nasdaq Capital Market under the symbol 'TCBP' after the ratio change.

What happens to fractional ADSs resulting from TCBP's ratio change?

Fractional new ADSs will be aggregated and sold by the Depositary. The net cash proceeds from the sale will be distributed to the applicable ADS holders after deduction of fees, taxes, and expenses.