Virpax Pharmaceuticals Announces Reverse Stock Split

Rhea-AI Summary

Virpax Pharmaceuticals (NASDAQ: VRPX) has announced a 1-for-25 reverse stock split effective March 20, 2025. The company's common stock will begin trading on a split-adjusted basis on March 21, 2025, maintaining its VRPX symbol on the Nasdaq Capital Market.

The reverse split will reduce outstanding shares from approximately 31,062,581 to 1,242,504. Stockholder ownership percentages will remain unchanged except for fractional shares. The split will proportionally adjust the number of shares issuable through equity awards and warrants, including their exercise prices.

This strategic move aims to achieve compliance with Nasdaq's minimum bid price requirement of $1.00 per share and attract a broader investor base. Stockholders approved the split at a January 15, 2025 special meeting, granting the Board discretion for a ratio between 1-for-2 and 1-for-240.

Positive

• Strategic move to maintain Nasdaq listing compliance
• Potential to attract broader institutional and retail investor base
• Stockholder approval obtained for the corporate action

Negative

• Significant reduction in total outstanding shares may impact stock liquidity
• Cash payments for fractional shares could result in forced partial position liquidation for some investors

Insights

Financial Analyst

Virpax's announced 1-for-25 reverse stock split represents a significant defensive financial maneuver primarily aimed at maintaining Nasdaq compliance. With shares currently trading at $0.13, this action will mathematically boost the share price to approximately $3.25 - just enough to clear Nasdaq's $1.00 minimum bid requirement.

The magnitude of this consolidation is particularly noteworthy. By reducing outstanding shares from 31.06 million to 1.24 million, management is implementing a dramatic solution that suggests underlying financial challenges. While reverse splits don't fundamentally change company value (market cap remains around $3.58 million), they typically signal financial distress rather than strength.

This maneuver buys Virpax time, but doesn't address the fundamental business challenges that drove the share price below Nasdaq requirements in the first place. For pharmaceutical companies with promising pipelines, such dramatic share consolidations are typically avoidable. The extremely small post-split market capitalization will continue limiting institutional investor interest despite management's stated intentions.

Most concerning is the timing and scale - stockholders granted the board authority for a split ratio between 1-for-2 and 1-for-240 in January, with management ultimately selecting a ratio (1-for-25) in the higher range, suggesting urgency in addressing compliance issues. The post-split share price will provide minimal cushion above minimum requirements, potentially necessitating additional defensive actions if business fundamentals don't improve.

BERWYN, Pa.--(BUSINESS WIRE)-- Virpax Pharmaceuticals, Inc. (Nasdaq: VRPX) (“Virpax” or the “Company”) a company specializing in developing non-addictive products for pain management, post-traumatic stress disorder, central nervous system (CNS) disorders and anti-viral barrier indications, today announced that it will effect a 1-for-25 reverse stock split (“reverse split”) of its common stock, par value $0.0001 per share (“Common Stock”), that will become effective at 12:01 a.m. Eastern Time on March 20, 2025. The Company’s Common Stock will continue to trade on the Nasdaq Capital Market (“Nasdaq”) under the symbol “VRPX” and will begin trading on a split-adjusted basis when the Nasdaq opens on March 21, 2025 (“Effective Time”). The new CUSIP number for the Common Stock following the reverse split will be 928251305.

At a special meeting of stockholders held on January 15, 2025 (the “Special Meeting”), the Company’s stockholders granted the Company’s Board of Directors (the “Board”) the discretion to effect a reverse stock split of the Company’s Common Stock at a ratio of not less than 1-for-2 and not more than 1-for-240, with such ratio to be determined by the Board. Following the Special Meeting, the final ratio of 1-for-25 was recently approved by the Board.

The 1-for-25 reverse stock split will proportionally reduce the number of outstanding shares of Common Stock from approximately 31,062,581 shares to approximately 1,242,504 shares and the ownership percentage of each shareholder will remain unchanged other than as a result of fractional shares. Proportional adjustments will be made to the number of shares of Common Stock issuable upon exercise or conversion of the Company’s outstanding equity awards and warrants, as well as the applicable exercise price. There will be no change to the total number of authorized shares of Common Stock as set forth in the Amended and Restated Certificate of Incorporation of the Company. Stockholders whose shares are held in brokerage accounts should direct any questions concerning the reverse stock split to their broker. All stockholders of record, whose shares are held with the Company’s transfer agent, VStock Transfer, may direct questions to VStock Transfer at (212) 828-8436 or action@vstocktransfer.com.

The reverse split is intended to bring the Company into compliance with the minimum bid price requirement for maintaining the listing of its Common Stock on the Nasdaq Capital Market, and to make the bid price more attractive to a broader group of institutional and retail investors. The Nasdaq Capital Market requires, among other things, that a listed company’s common stock maintain a minimum bid price of at least $1.00 per share.

The Company’s transfer agent, VStock Transfer, LLC, which is also acting as the paying agent for the reverse split, will provide instructions to stockholders regarding the process for exchanging stock certificates. Any person who would otherwise be entitled to a fractional share of Common Stock as a result of the reclassification and combination following the Effective Time (after taking into account all fractional shares of Common Stock otherwise issuable to such holder) shall be entitled to receive a cash payment equal to the number of shares of the Common Stock held by such stockholder before the reverse split that would otherwise have been exchanged for such fractional share interest multiplied by the average closing sales price of the Common Stock as reported on the Nasdaq for the ten days preceding the Effective Time.

About Virpax Pharmaceuticals

Virpax is developing branded, non-addictive pain management products candidates using its proprietary technologies to optimize and target drug delivery. Virpax is initially seeking FDA approval for two prescription drug candidates that employ two different patented drug delivery platforms. Probudur™ is a single injection liposomal bupivacaine formulation being developed to manage post-operative pain and Envelta™ is an intranasal molecular envelope enkephalin formulation being developed to manage acute and chronic pain, including pain associated with cancer. Virpax is also using its intranasal Molecular Envelope Technology (MET) to develop one other prescription product candidate, NobrXiol™, which is being developed for the nasal delivery of a pharmaceutical-grade cannabidiol (CBD) for the management of rare pediatric epilepsy. Virpax has competitive cooperative research and development agreements (CRADAs) for two of its prescription drug candidates, one with the National Institutes of Health (NIH) and one with the Department of Defense (DOD). Virpax is also seeking partners for two nonprescription product candidates: AnQlar, which is being developed to inhibit viral replication caused by influenza or SARS-CoV-2, and Epoladerm™, which is a topical diclofenac spray film formulation being developed to manage pain associated with osteoarthritis. For more information, please visit https://www.virpaxpharma.com and follow us on Twitter, LinkedIn and YouTube.

Forward-Looking Statements

This press release contains certain forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995, as amended, including those described below. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which we operate and management’s current beliefs and assumptions.

These statements may be identified by the use of forward-looking expressions, including, but not limited to, “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “potential,” “predict,” “project,” “should,” “would” and similar expressions and the negatives of those terms. These statements relate to future events and involve known and unknown risks, uncertainties, and other factors, including the additional capital which will be necessary to complete studies and clinical trials that the Company plans to initiate and other factors listed under “Risk Factors” in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q that the Company has filed with the U.S. Securities and Exchange Commission. Prospective investors are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250319664490/en/

Investor Contact:

info@virpaxpharma.com

Source: Virpax Pharmaceuticals, Inc.

FAQ

When will the Virpax Pharmaceuticals (VRPX) 1-for-25 reverse stock split take effect?

The reverse stock split will take effect at 12:01 a.m. Eastern Time on March 20, 2025, with split-adjusted trading beginning March 21, 2025.

How many VRPX shares will be outstanding after the reverse stock split?

The number of outstanding shares will reduce from approximately 31,062,581 to 1,242,504 following the 1-for-25 reverse split.

What happens to fractional shares in the VRPX reverse stock split?

Holders of fractional shares will receive cash payments based on the average closing price of VRPX stock for the ten days preceding the effective time.

Why is Virpax Pharmaceuticals (VRPX) implementing a reverse stock split?

The reverse split aims to comply with Nasdaq's minimum bid price requirement of $1.00 per share and attract a broader group of institutional and retail investors.