8-K: Calidi Biotherapeutics Announces 1-for-10 Reverse Stock Split

Calidi Biotherapeutics will implement a 1-for-10 reverse stock split, effective July 15, 2024, to consolidate its outstanding shares.

Summary

• Calidi Biotherapeutics has announced a 1-for-10 reverse stock split of its common stock.
• The reverse stock split was approved by the Board of Directors and is scheduled to take effect on July 15, 2024, at 12:01 a.m. Eastern Time.
• Trading on a split-adjusted basis will begin when the NYSE American market opens on July 15, 2024, under the existing symbol CLDI.
• The new CUSIP number for the common stock will be 320703 309.
• The company's publicly-traded warrants will continue to trade under the symbol CLDI WS, and their CUSIP will not change.
• The reverse stock split will reduce the total number of outstanding shares to approximately one-tenth of the pre-split amount.
• No fractional shares will be issued; instead, fractional shares will be rounded up to the nearest whole share.
• Adjustments will be made to the exercise prices and number of shares underlying equity awards, as well as to the number of shares issuable under equity incentive plans.
• Publicly-traded warrants will become exercisable for 1/10th of a share at an exercise price of $115 per whole share.
• Private warrants will have their exercise price multiplied by 10 per whole share.
• The reverse stock split will not change the number of authorized shares or the par value per share.
• Equiniti Trust Company, LLC has been appointed as the exchange agent for the reverse stock split.
• Registered stockholders holding shares in book-entry form do not need to take any action.
• Stockholders with shares in certificate form will receive instructions from Computershare on how to exchange their certificates.

Sentiment

Score: 5

Explanation: The announcement of a reverse stock split is generally neutral to slightly negative. While it can help with listing compliance, it doesn't inherently improve the company's fundamentals. The sentiment is therefore neutral.

Positives

• The reverse stock split will consolidate the company's shares, which may make the stock more attractive to some investors.
• The rounding up of fractional shares ensures that no shareholder loses out due to the split.
• The company has appointed an exchange agent to facilitate the process, making it easier for shareholders.

Negatives

• The reverse stock split reduces the number of outstanding shares, which can be perceived negatively by some investors.
• The exercise price of warrants will be significantly increased, which may make them less attractive to holders.

Risks

• The company may not be able to raise sufficient capital to support its clinical trials.
• Early clinical trial results may not predict final results.
• Clinical outcomes may change as more patient data becomes available.
• The company may not receive FDA approval for its therapeutic candidates.

Future Outlook

The company anticipates the reverse stock split will be effective on July 15, 2024, and will continue to pursue its clinical trials and development of therapeutic candidates.

Management Comments

• The Board of Directors has approved the reverse stock split of its outstanding shares of common stock at a ratio of 1-for-10.

Industry Context

Reverse stock splits are often used by companies to increase their stock price and maintain listing requirements, particularly in the biotechnology sector where stock prices can be volatile. This action is not uncommon for companies in this industry.

Comparison to Industry Standards

• Reverse stock splits are a common mechanism used by companies, particularly in the biotech sector, to maintain listing compliance and potentially attract institutional investors.
• Other companies such as Cassava Sciences (SAVA) and Ocugen (OCGN) have also recently undertaken reverse stock splits to manage their share price.
• The 1-for-10 ratio is within the typical range for reverse stock splits, which can vary from 1-for-2 to 1-for-50 or more.
• The impact of a reverse stock split on a company's valuation is often neutral, but it can sometimes be perceived negatively by investors if it is seen as a sign of financial distress.

Stakeholder Impact

• Shareholders will see a reduction in the number of shares they own, but the value of their holdings should remain the same immediately after the split.
• Warrant holders will see adjustments to their exercise prices and the number of shares they can acquire.
• The company's employees may see adjustments to their equity awards.

Next Steps

• The reverse stock split will be effective on July 15, 2024.
• The company will continue to pursue its clinical trials and development of therapeutic candidates.
• Stockholders with shares in certificate form will receive instructions from Computershare on how to exchange their certificates.

Key Dates

Keywords

reverse stock split, common stock, warrants, stockholders, NYSE American, CLDI, biotechnology, clinical-stage, immuno-oncology