8-K: BioNexus Gene Lab Corp. Creates Series Z Preferred Stock to Facilitate Reverse Stock Split

BioNexus Gene Lab Corp. has created a new Series Z Preferred Stock to increase the likelihood of a successful reverse stock split vote.

Summary

• BioNexus Gene Lab Corp. filed Articles of Amendment with the Wyoming Secretary of State on February 11, 2025, creating one share of Series Z Convertible Preferred Stock.
• The Board of Directors approved the creation and issuance of the Series Z Preferred Stock on February 10, 2025, to Muhammad Azrul bin Abdul Hamid, a board member and Audit Committee member.
• The Series Z Preferred Stock has 5 billion votes and will vote with the common stock exclusively on the Reverse Stock Split proposal at a shareholder meeting in 2025.
• The Series Z Preferred Stock will mirror the votes of common stockholders on the Reverse Stock Split, increasing the aggregate voting power.
• The company believes this action complies with Nasdaq rule 5640.
• The Series Z Preferred Stock can be cancelled at any time by the Board of Directors or automatically upon shareholder approval of the Reverse Stock Split.

Sentiment

Score: 6

Explanation: The announcement is neutral. It describes a corporate action to facilitate a reverse stock split, which can have both positive and negative implications depending on the context and investor perspective.

Positives

• The creation of Series Z Preferred Stock aims to ensure the Reverse Stock Split proposal is approved, which the company believes is beneficial.
• The company believes that this action is compliant with Nasdaq rule 5640.

Risks

• The success of the Reverse Stock Split still depends on the votes of common stockholders.
• The Series Z Preferred Stock could be viewed negatively by some shareholders if they believe it unfairly influences the voting outcome.

Future Outlook

The company intends to hold a shareholder meeting in 2025 to vote on the Reverse Stock Split proposal.

Management Comments

• The purpose of the Series Z Preferred Stock increases the likelihood of procuring the votes necessary to effectuate the Reverse Stock Split Proposal should a majority of the common stockholders vote in favor of the Reverse Stock Split Proposal in the upcoming Special Shareholders Meeting as set forth in the recent Preliminary Proxy Statement filed by the Company.

Industry Context

Reverse stock splits are often used by companies to increase their stock price to meet minimum listing requirements or to make their stock more attractive to investors.

Related Party Transactions

• The Series Z Preferred Stock was issued to Muhammad Azrul bin Abdul Hamid, a member of the Board of Directors and the Audit Committee.

Stakeholder Impact

• Shareholders will be impacted by the potential Reverse Stock Split.
• The Reverse Stock Split could affect the stock price and trading volume.

Next Steps

• Hold a shareholder meeting to vote on the Reverse Stock Split proposal during calendar year 2025.

Key Dates