A wave of reverse stock splits appears almost inevitable, as battered stocks try to maintain their stock listing and win over investors who shy away from speculative stocks that trade in pocket change. Occasionally, companies need to do reverse stock splits to alleviate the threat of being delisted from the Nasdaq for having a share price under $1.00, and that’s what Atossa Genetics (NASDAQ:ATOS) decided to do today.
Atossa announced a reverse split of its common stock at a ratio of 1-for-12, effective April 20, 2018. The reverse split was approved by the Company’s stockholders at an annual meeting of the stockholders initially held on April 12, 2018 and reconvened on April 19, 2018.
In reaction, Atossa shares are currently trading at $3.75, down $0.61 or -14.01%.
As a result of the reverse split, each twelve pre-split shares of common stock outstanding will automatically combine into one new share of common stock without any action on the part of the holders, and the number of outstanding common shares will be reduced from approximately 31.8 million shares to approximately 2.65 million shares. The reverse split will also apply to common stock issuable upon the exercise of the Company’s outstanding warrants and stock options.
Kyle Guse, CFO and General Counsel, stated, “NASDAQ requires that listed companies maintain a $1 minimum bid and the reverse stock split should allow us to satisfy this requirement. A higher stock price should also help us attract new stockholders. We remain very optimistic about our business. We have a Phase 2 study underway at Montefiore Medical Center, a Phase 1 study underway using our proprietary topical Endoxifen in male subjects and we are planning to start two more Phase 2 studies using our proprietary Endoxifen – one for mammographic breast density and another for patients who are refractory to tamoxifen. We are also developing our proprietary intra-ductal microcatheters to deliver CAR-T and other immunotherapies. We look forward to reporting progress on these programs.”