8-K: Phio Pharmaceuticals Announces 1-for-9 Reverse Stock Split to Maintain Nasdaq Listing

Phio Pharmaceuticals has approved a 1-for-9 reverse stock split to increase its share price and maintain its Nasdaq listing.

Summary

• Phio Pharmaceuticals has announced a 1-for-9 reverse stock split of its common stock.
• The reverse stock split is intended to increase the per share trading price to meet the minimum $1.00 bid price requirement for continued listing on the Nasdaq Capital Market.
• The reverse stock split will be effective on July 5, 2024, at 12:01 a.m. Eastern Time.
• The company's common stock will begin trading on a post-split basis on July 5, 2024, under the existing symbol PHIO, but with a new CUSIP number, 71880W501.
• The reverse stock split will reduce the number of outstanding shares from approximately 4.6 million to approximately 0.5 million.
• No fractional shares will be issued; instead, shareholders will receive a cash payment for any fractional shares they would have been entitled to.
• The reverse stock split will not alter any stockholder's percentage interest in the company, except for adjustments due to fractional shares.
• The company has retained Computershare Trust Company, N.A. as its exchange agent for the reverse stock split.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative as the reverse stock split is a measure to avoid delisting, indicating potential underlying issues with the company's stock performance. However, it is a necessary step to maintain the Nasdaq listing.

Positives

• The reverse stock split aims to ensure continued listing on the Nasdaq Capital Market.
• The company is taking proactive steps to comply with listing requirements.
• The reverse stock split will not alter any stockholder's percentage interest in the company, except for adjustments due to fractional shares.

Negatives

• The reverse stock split is a measure to avoid delisting, which may indicate underlying issues with the company's stock performance.
• The reduction in outstanding shares may be perceived negatively by some investors.

Risks

• The company's stock price may not remain above the $1.00 minimum bid price requirement even after the reverse stock split.
• There is a risk that the company may need to take further actions to maintain its Nasdaq listing if the stock price does not improve.
• The reverse stock split could negatively impact investor sentiment.

Future Outlook

The company intends to maintain its listing on the Nasdaq Capital Market by ensuring its share price meets the minimum bid price requirement.

Management Comments

• The Board of Directors has approved a reverse stock split of its shares of common stock at a ratio of 1-for-9.
• The reverse stock split is being implemented to increase the per share trading price of the Company's common stock, for the purpose of ensuring a share price high enough to comply with the minimum $1.00 bid price requirement for continued listing on The Nasdaq Capital Market.

Industry Context

Reverse stock splits are a common measure for companies facing delisting from major exchanges due to low share prices. This action is not unique to Phio Pharmaceuticals and is often seen in the biotechnology sector.

Comparison to Industry Standards

• Many biotechnology companies with low share prices have implemented reverse stock splits to maintain their exchange listings.
• For example, companies like Agenus Inc. and Ocugen Inc. have also recently undergone reverse stock splits to comply with Nasdaq's minimum bid price rule.
• The 1-for-9 ratio is within the typical range for reverse stock splits, which can vary from 1-for-2 to 1-for-20 or more.
• The success of a reverse stock split in maintaining listing and improving investor confidence varies, and is often dependent on the company's underlying performance and future prospects.

Stakeholder Impact

• Shareholders will experience a reduction in the number of shares they own, but their percentage ownership will remain the same, except for adjustments due to fractional shares.
• Shareholders will receive cash payments in lieu of fractional shares.
• The company's employees and other stakeholders may be impacted by the company's efforts to maintain its Nasdaq listing.

Next Steps

• The company's common stock will begin trading on a post-split basis on July 5, 2024.
• Computershare will provide instructions to stockholders regarding the exchange of shares.
• The company will continue to monitor its stock price to ensure compliance with Nasdaq listing requirements.

Key Dates

Keywords

reverse stock split, Nasdaq, listing, share price, common stock, PHIO, biotechnology, INTASYL, immuno-oncology