DEFR14A: Klotho Neurosciences Seeks Reverse Split, Boosts Equity Plan

Klotho Neurosciences, Inc. will hold a Special Meeting to vote on a reverse stock split to meet Nasdaq listing requirements and an increase in shares for its equity incentive plan.

Summary

• A Special Meeting of Stockholders will be held virtually on February 17, 2026, at 12:30 p.m. Eastern Time.
• Stockholders will vote on a proposal to amend the company's Certificate of Incorporation to effect a reverse stock split at a ratio between one-for-2 and one-for-50, at the Board's discretion, by June 30, 2026.
• The primary purpose of the reverse stock split is to increase the per share market price to meet The Nasdaq Capital Market's minimum bid price requirement of $1.00, following a delinquency notification received on September 19, 2025.
• Stockholders will also vote on amending the 2024 Equity Incentive Plan to increase the number of shares available for issuance from 1,668,126 to 10,000,000, an increase of 8,331,874 shares.
• The increase in the equity incentive plan shares is intended to attract and retain key service providers and align their interests with stockholders, with the new allocation representing approximately 13.3% of outstanding shares as of December 31, 2025.
• The company's projected annual burn rate for equity awards is 50%, and the Board expects the plan to not need additional shares until December 31, 2026.
• A proposal to adjourn the Special Meeting, if necessary, to solicit additional proxies or establish a quorum will also be voted upon.
• As of January 12, 2026, there were 73,536,722 shares of common stock issued and outstanding.
• The fair market value of a share of common stock as of the Record Date (January 15, 2026) was $0.18, or $4.50 on a post-Reverse Stock Split-adjusted basis (assuming a 1-for-25 split for calculation purposes, though the filing states 1-for-2 to 1-for-50).

Sentiment

Score: 4

Explanation: The sentiment is moderately negative. While the company is taking proactive steps to address critical issues (Nasdaq listing, employee retention), the underlying reason for these actions (low stock price, potential delisting) is negative. The reverse split carries inherent risks and negative perceptions, and the equity plan increase, while necessary, causes dilution.

Positives

• The proposed reverse stock split aims to regain compliance with Nasdaq's minimum bid price requirement, preventing potential delisting.
• Increasing the shares available for the 2024 Equity Incentive Plan is crucial for attracting, motivating, and retaining key employees, consultants, and Board members.
• The equity incentive plan aligns the interests of service providers with those of stockholders, promoting long-term growth and value creation.
• The Board's flexibility to choose a reverse split ratio within a range allows for adaptation to market conditions to maximize benefits.

Negatives

• The necessity of a reverse stock split indicates a significantly low stock price, reflecting poor market performance or investor sentiment.
• Reverse stock splits can carry a negative perception among investors and may not guarantee a sustained increase in stock price or market capitalization.
• The increase in shares for the equity incentive plan, while beneficial for retention, will result in approximately 13.3% dilution for existing stockholders.
• The company received a delinquency notification from Nasdaq for failing to meet the $1.00 minimum bid price requirement, highlighting a significant compliance issue.

Risks

• There is no assurance that the reverse stock split will result in a sustained increase in the market price of common stock or enable the company to maintain Nasdaq compliance.
• The reverse stock split may decrease the liquidity of the common stock due to a reduced number of outstanding shares and potentially fewer market makers.
• Stockholders owning 'odd lots' (less than 50 shares) after the reverse split may face higher transaction costs per share.
• The reverse stock split could lead to a decrease in overall market capitalization if the per share price does not increase proportionally.
• The increased proportion of unissued authorized shares resulting from the reverse split could have an anti-takeover effect, potentially diluting existing ownership.
• The current economic environment, company debt, and volatile equity market conditions could limit the ability to raise new equity capital in the future.

Future Outlook

The company expects the reverse stock split to increase its per share market price to regain and maintain compliance with Nasdaq's minimum bid price requirement. It also anticipates that the split will make its common stock more attractive to a broader range of investors, including institutional investors, and enhance liquidity. The increased share pool for the equity incentive plan is expected to enable the company to continue attracting and retaining key service providers and motivate them to achieve long-term business growth.

Management Comments

• "The Board of Directors has fixed the close of business on January 15, 2026 as the record date for the Special Meeting and only holders of shares of record at that time will be entitled to vote and participate at the Special Meeting and any postponements, adjournments or continuations thereof."
• "We expect that the primary focus of the Board in determining whether or not to effectuate the Reverse Stock Split will be the ability to obtain and maintain a continued price of at least $1.00 per share of our Common Stock on The Nasdaq Capital Market without effecting the Reverse Stock Split."
• "The Companys primary reasons for approving and recommending the Reverse Stock Split are to make our common stock more attractive to certain institutional investors, which would provide for a stronger investor base and to increase the per share price and bid price of our common stock to regain compliance with the continued listing requirements of Nasdaq."
• "The Board believes the increase [in authorized shares for the 2024 Plan] is appropriate for use to fund the future operations of the Company."
• "The Board determined that its projected rate of equity compensation usage is reasonable and that, following the Plan Amendment, the 2024 Plan should not need an additional increase of shares until December 31, 2026."

Industry Context

The company's need for a reverse stock split is a common response for companies facing delisting from major exchanges like Nasdaq due to low share prices. Many institutional investors and brokerage firms have policies against investing in or recommending 'low-priced' stocks, making a higher per-share price desirable for broader market appeal and liquidity. Equity incentive plans are standard tools across industries for talent acquisition and retention, with the proposed increase reflecting a need to remain competitive in compensation strategies.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results for direct assessment against global benchmarks. However, the actions proposed (reverse stock split to meet listing requirements, increasing equity incentive pool) are common strategies employed by companies in similar situations across various industries.

Corporate Governance

Stakeholder Impact

• **Shareholders:** Will experience a reduction in the number of shares held (due to reverse split) but maintain the same percentage ownership (excluding fractional share rounding). Face potential dilution from the increased equity incentive plan. Their voting power on the proposals is critical for the company's future compliance and talent strategy.
• **Employees, Consultants, and Board Members:** Will benefit from an increased pool of shares available for equity awards under the 2024 Equity Incentive Plan, enhancing compensation and retention incentives.
• **Nasdaq Stock Market:** The company's actions are directly aimed at regaining compliance with Nasdaq's listing rules, impacting its relationship with the exchange.

Next Steps

• Stockholders will vote on the proposals at the Special Meeting on February 17, 2026.
• If approved, the Board of Directors will determine the specific reverse stock split ratio (between 1-for-2 and 1-for-50) and may effectuate it by June 30, 2026.
• The company will file a Certificate of Amendment with the Delaware Secretary of State to make the reverse stock split effective.
• If approved, the 2024 Equity Incentive Plan will be amended to increase available shares to 10,000,000, allowing for future equity awards.

Key Dates

Recommendation

The filing outlines critical corporate actions (reverse stock split, equity plan increase) primarily aimed at addressing a Nasdaq listing deficiency and improving long-term operational viability. While these are necessary steps to avoid delisting and retain talent, they do not provide immediate indicators of improved financial performance. A seasoned investor would likely 'hold' to observe the outcome of these proposals, the market's reaction to the reverse split, and subsequent financial results before making a definitive buy or sell decision. The inherent risks of reverse splits and dilution warrant caution.

Keywords

Reverse Stock Split, Equity Incentive Plan, Nasdaq Listing, Stockholder Meeting, Corporate Governance, Stock Dilution, KLTO, SEC Filing, Proxy Statement