DEFR14A: enVVeno Medical Proposes Reverse Stock Split

enVVeno Medical Corporation is seeking stockholder approval for a reverse stock split to maintain its Nasdaq listing and improve stock marketability.

Summary

• A supplement to the original Proxy Statement for the 2025 Annual Meeting has been issued, adding a new Proposal 5.
• Proposal 5 seeks stockholder approval to grant authority to the Board of Directors to effectuate a reverse stock split of common stock.
• The proposed reverse stock split ratio would be between one-for-five and one-for-thirty-five, determined at the Board's sole discretion.
• The primary objective of the reverse split is to increase the per share trading price of common stock above the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market.
• The company received a notice from The NASDAQ Stock Market indicating non-compliance with Rule 5550(a)(2) due to the closing bid price falling below $1.00 for 30 consecutive business days.
• The 2025 Annual Meeting of Stockholders will be held virtually on Thursday, December 11, 2025, at 9:00 A.M. PST.
• The Board of Directors unanimously recommends a vote FOR the reverse stock split proposal, along with other proposals including director elections, executive compensation, auditor ratification, and the 2025 Equity Incentive Plan.
• The Board amended the company's bylaws on November 17, 2025, reducing the quorum requirement for stockholder meetings from a majority to thirty three and one-third percent of outstanding voting stock.

Sentiment

Score: 3

Explanation: The filing addresses a critical issue (potential delisting) by proposing a reverse stock split, which is generally viewed as a negative indicator of past performance. While the intent is to resolve a problem, the underlying cause (low stock price) is a significant concern, reflecting poor market sentiment or operational challenges.

Positives

• The proposed reverse stock split aims to maintain the company's listing on Nasdaq, which is crucial for liquidity and marketability of common stock.
• Maintaining Nasdaq listing could enhance the company's appeal to institutional investors and brokerage firms, many of whom have policies against lower-priced stocks.
• The reverse split is not expected to have any dilutive effect on stockholders, as each stockholder would hold the same percentage of common stock immediately following the split (except for de minimus adjustments for fractional shares).
• The relative voting and other rights accompanying the shares would not be affected by the reverse split.

Negatives

• There is no assurance that the reverse stock split will achieve the desired effect of increasing the market price proportionately or sustaining it above the $1.00 Nasdaq minimum.
• If the per share market price does not increase proportionately, the company's market capitalization could be reduced, potentially significantly.
• The reduction in the number of outstanding shares could increase transaction costs for stockholders selling odd lots (less than 100 shares).
• The reduced number of shares outstanding after the reverse split could adversely affect liquidity.
• The company has already received a notice from Nasdaq regarding non-compliance with the minimum bid price requirement, indicating a current challenge.

Risks

• Risk of de-listing from The Nasdaq Capital Market if the reverse stock split does not sufficiently raise the stock price or if the Board decides to abandon the plan.
• The market price of common stock may not increase proportionately to the reverse split ratio or may not be sustained at a higher level.
• The company's market capitalization could decrease if the per share price does not increase proportionately.
• Stockholders holding less than a round lot (100 shares) may face higher transaction costs on a per-share basis if they sell their shares.
• The reduced number of shares outstanding after the reverse split could adversely affect the liquidity of the common stock.

Future Outlook

The Board's primary objective is to raise the per share trading price of common stock to meet Nasdaq's minimum bid price requirement, thereby maintaining the company's listing and enhancing marketability. However, there is no assurance that the reverse split will achieve these desired effects, that the market price will increase proportionately, or that it will be sustained. The Board retains discretion to abandon the reverse split at any time prior to its effectiveness.

Management Comments

• "We are writing to notify you of important information about the 2025 Annual Meeting of Stockholders." Robert A. Berman, Chief Executive Officer
• "The Company strongly encourages you to submit a new proxy so that your vote will be considered on Proposal 5 as well."
• "The Board of Directors unanimously recommends a vote FOR the election of the Class II Directors, FOR the approval, on a non-binding, advisory basis, of the compensation of our named executive officers, FOR the ratification of the appointment by the Audit Committee of the Companys Board of Directors of CBIZ CPAs P.C. as the Companys independent registered public accounting firm for the fiscal year ending December 31, 2025, FOR the approval of the adoption of the Companys 2025 Equity Incentive Plan and FOR the reverse stock split proposal."
• "The Board unanimously recommends a vote FOR the Reverse Split Proposal."

Industry Context

Reverse stock splits are a common measure for companies facing potential delisting from major exchanges like Nasdaq due to their stock price falling below minimum bid requirements. This action is typically a reactive strategy to maintain compliance and investor confidence, as delisting can severely impair a company's liquidity, access to capital, and overall market perception. Many institutional investors and brokerage firms avoid 'penny stocks,' making a higher per-share price desirable for broader market appeal and analyst coverage.

Management Changes

Corporate Governance

Stakeholder Impact

• **Shareholders**: Face potential for increased per-share price, but also risks of non-proportionate increase, sustained low price, and higher transaction costs for odd lots. Their voting rights remain unchanged.
• **Potential Investors**: A higher per-share price resulting from the reverse split may make the stock more attractive to institutional investors and brokerage firms that avoid lower-priced stocks.
• **Company**: The ability to maintain Nasdaq listing is critical for the company's access to capital markets, liquidity, and overall corporate reputation. Delisting could severely impact these aspects.

Next Steps

• Stockholders are encouraged to submit a new proxy card to vote on all five proposals, including the reverse stock split, at the Annual Meeting on December 11, 2025.
• If approved, the Board will determine the exact ratio (between 1-for-5 and 1-for-35) and the timing of the reverse stock split.
• If the reverse split is effected, a Certificate of Amendment will be filed with the Secretary of State of Delaware.
• A letter of transmittal will be mailed to stockholders for the exchange of old stock certificates for new ones reflecting the post-split shares.

Key Dates

Recommendation

The company is taking a necessary step to address a critical issue (potential delisting from Nasdaq) by proposing a reverse stock split. While this action aims to maintain market access and liquidity, it does not fundamentally alter the company's underlying business performance that led to the low stock price. Investors should hold to observe the outcome of the reverse split and subsequent business developments. The effectiveness of the split in sustaining a higher stock price and the company's ability to improve its operational performance remain key uncertainties.

Keywords

enVVeno Medical, NVNO, Reverse Stock Split, Nasdaq Listing, Proxy Statement, Corporate Governance, Stockholder Meeting, Delisting Risk, Equity Incentive Plan, Executive Compensation, Auditor Ratification