DEFA14A: Panbela Therapeutics Announces Preferred Stock Issuance and Nasdaq Delisting

Panbela Therapeutics issues preferred stock to its Chairman, plans for CBOE listing, and postpones special meeting due to Nasdaq delisting.

Summary

• Panbela Therapeutics entered into a Subscription Agreement with its Chairman, Michael T. Cullen, on April 23, 2024.
• The company issued one share of Series A Preferred Stock to Cullen for $10.
• The Preferred Stock has 90,000,000 votes and votes with common stock on reverse stock split proposals.
• Nasdaq filed a Form 25 on April 25, 2024, indicating the delisting of Panbela's common stock.
• Panbela is applying to list its common stock on the CBOE US Equity Listings Tier II.
• The company intends to maintain quotation of its common stock on the OTCQB.
• The Special Meeting regarding the reverse stock split has been postponed to May 28, 2024, with a new record date of April 24, 2024.
• The company will file and mail a new proxy statement for the Special Meeting.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the Nasdaq delisting, despite the company's efforts to find a new exchange and pursue a reverse stock split. The small investment by the Chairman does little to offset the negative news.

Positives

• The company is actively seeking a new exchange listing on the CBOE.
• The Chairman's investment demonstrates confidence in the company's future, albeit a small amount.
• The company is taking steps to address the minimum per share bid price requirement for listing on the CBOE.

Negatives

• Nasdaq has initiated the delisting of Panbela Therapeutics' common stock.
• The company's common stock will be delisted before the company will have an opportunity to effect a reverse stock split.
• The voting standard for determining whether stockholders have approved the reverse stock split will revert to the substantially higher requirement of the affirmative vote of a majority the outstanding stock entitled to vote on the matter.

Risks

• There is no assurance that the CBOE listing application will be approved.
• A trading market may not develop on the CBOE if the listing is approved.
• The company faces a higher voting requirement for the reverse stock split due to the delisting.
• The company's ability to satisfy the minimum per share bid price requirement for initial listing on the CBOE is uncertain.

Future Outlook

The company intends to pursue a listing on the CBOE and effect a reverse stock split to meet listing requirements. The company will need to obtain stockholder approval for the reverse stock split at the Special Meeting.

Industry Context

Companies facing delisting from major exchanges often seek alternative listings on smaller exchanges like CBOE or OTCQB to maintain some level of trading liquidity. Reverse stock splits are a common strategy to increase share price and meet minimum listing requirements.

Comparison to Industry Standards

• Many small-cap biotech companies face challenges in maintaining Nasdaq listing compliance due to volatile stock prices and the need for capital raises.
• Reverse stock splits are a frequently used, though often viewed negatively by investors, method to regain compliance.
• Seeking listing on exchanges like CBOE is a viable alternative for companies that no longer meet Nasdaq requirements, but it may result in lower trading volume and visibility.

Related Party Transactions

• The issuance of Series A Preferred Stock to Michael T. Cullen, the Chairman of the Board, is a related party transaction.

Stakeholder Impact

• Shareholders may be concerned about the delisting from Nasdaq and the potential impact on stock value.
• Employees may experience uncertainty due to the company's financial challenges and strategic changes.
• The company's ability to raise capital and fund its clinical development programs could be affected.

Next Steps

• Prepare, file, and mail a new proxy statement for the Special Meeting.
• Seek approval for listing on the CBOE US Equity Listings Tier II.
• Obtain stockholder approval for the reverse stock split at the Special Meeting on May 28, 2024.

Key Dates

Keywords

delisting, reverse stock split, preferred stock, CBOE, Nasdaq, Panbela Therapeutics