DEF: ProMIS Neurosciences Plans Reverse Stock Split Vote

ProMIS Neurosciences Inc. will hold a Special Meeting on November 17, 2025, for shareholders to vote on a share consolidation to meet Nasdaq's minimum bid price requirement.

Summary

• ProMIS Neurosciences Inc. is convening a virtual Special Meeting of shareholders on Monday, November 17, 2025, at 8:00 a.m. Eastern Time.
• Shareholders will vote on a special resolution to authorize the Board of Directors to effect a share consolidation (reverse stock split) of common shares at a ratio ranging from one-for-five up to one-for-twenty-five.
• The Board will have discretion to determine the exact ratio and implement the consolidation, if at all, within one year from the date of the Special Meeting (by November 17, 2026).
• A second proposal seeks approval to adjourn the Special Meeting to a date no later than December 17, 2025, if there are insufficient votes for the share consolidation proposal, to solicit additional proxies.
• The primary objective of the share consolidation is to raise the per-share trading price to meet Nasdaq's minimum $1.00 bid price requirement and avoid delisting.
• As of September 17, 2025, the company had 53,811,110 common shares outstanding.
• The Board of Directors unanimously recommends voting FOR both the Share Consolidation Resolution and the Adjournment of Special Meeting proposal.

Sentiment

Score: 4

Explanation: The filing addresses a critical regulatory compliance issue (Nasdaq delisting) with a proposed solution (reverse stock split). While the underlying reason for the action (low share price) is negative, the proactive step to maintain listing is a necessary and potentially positive move for the company's long-term stability and access to capital markets. However, the outcome is not guaranteed, and there are inherent risks associated with reverse stock splits.

Positives

• The share consolidation aims to raise the per-share trading price to meet Nasdaq's $1.00 minimum bid price requirement, preventing potential delisting.
• A higher stock price may generate increased interest from institutional investors and funds, who are often disinclined or prohibited from purchasing lower-priced stocks.
• The expected increased price level could encourage broker-dealers to transact in the company's common shares.
• Improved marketability and liquidity of common shares are anticipated, potentially facilitating future financings for the company.

Negatives

• There is no assurance that the share consolidation will proportionally increase the market price or result in a permanent increase in the per-share price.
• The market price per post-consolidation share may not exceed or remain above the $1.00 minimum bid price for a sustained period.
• Some investors may view a share consolidation negatively, potentially leading to a decrease in the company's total market capitalization.
• The reduced number of outstanding common shares after the consolidation could decrease liquidity and result in higher transaction costs, especially for odd lots (less than 100 shares).
• Under new Nasdaq Rule 5810(c)(3)(A)(iv), if the share price falls below $1.00 for 30 consecutive trading days within one year post-consolidation, or if cumulative reverse splits exceed 250:1 over two years, the company will not be eligible for any further compliance period and faces immediate delisting.

Risks

• Failure to approve the share consolidation could lead to delisting from the Nasdaq Capital Market if the common share price continues to trade below the $1.00 minimum.
• Delisting would likely result in the common shares being quoted on less efficient markets like the OTC Bulletin Board, leading to lower trading volume and difficulty for investors to buy or sell.
• The common shares could trade thinly as a microcap or penny stock, adversely decreasing to nominal trading levels and being avoided by retail and institutional investors, impairing liquidity.
• There is no guarantee that the share consolidation will achieve the desired results of increasing marketability and liquidity of the common shares.
• The total market capitalization of the common shares immediately following the share consolidation may not be equal to or greater than the total market capitalization immediately before.

Future Outlook

The company anticipates that the share consolidation, if effected, will immediately increase the price of its common shares to regain and maintain compliance with Nasdaq's listing requirements. It also expects a higher stock price to potentially generate greater investor interest, increase trading volume, and facilitate future financings. However, there is no assurance that the price will not decline after the consolidation or that the desired market effects will be sustained.

Management Comments

• Our Board strongly believes that the Share Consolidation is necessary to maintain our listing on Nasdaq.
• The Board recommends that you vote in favor of Proposals 1 and 2.

Industry Context

The proposed share consolidation by ProMIS Neurosciences Inc. is a common defensive corporate action taken by publicly traded companies whose stock price has fallen below the minimum bid price required by major stock exchanges like Nasdaq. This strategy aims to prevent delisting, which can severely impact a company's visibility, liquidity, and ability to raise capital. Many companies in the biotechnology and pharmaceutical sectors, particularly those in early development stages, may face similar challenges if their stock performance does not meet exchange requirements.

Corporate Governance

Legal Proceedings

• The company received a deficiency letter from Nasdaq on January 8, 2025, notifying it of non-compliance with the Nasdaq Listing Rule 5550(a)(2) (Bid Price Rule) due to its common shares trading below $1.00 for 30 consecutive business days. The company has an extended compliance period until December 29, 2025, to cure this deficiency.

Stakeholder Impact

• Shareholders: Will experience a reduction in the number of common shares held, but their proportionate ownership and voting rights will remain largely unchanged (subject to de minimis rounding of fractional shares). There is a potential for increased per-share price and improved marketability, but also risks of decreased liquidity and higher transaction costs for odd lots. Failure to approve could lead to delisting and impaired liquidity.
• Investors (potential): A higher stock price post-consolidation may make the company's shares more attractive to institutional investors and funds that have policies against investing in lower-priced stocks.
• Company (overall): Maintaining Nasdaq listing is crucial for credibility, access to capital markets, and overall corporate stability. Delisting would significantly hinder its ability to raise capital and attract investors.

Next Steps

• Shareholders will vote on the share consolidation and meeting adjournment proposals at the Special Meeting on November 17, 2025.
• If approved, the Board will determine the specific share consolidation ratio (between 1-for-5 and 1-for-25) and the effective date within one year from the Special Meeting (by November 17, 2026).
• The company will file Articles of Amendment with the Ontario Ministry of Business and Consumer Affairs to effect the share consolidation.
• Additional details regarding the share consolidation, including the specific ratio, will be publicly announced prior to its effective date.
• If Proposal 1 is not approved, the Chairperson may adjourn the Special Meeting to solicit additional proxies, no later than December 17, 2025.
• The company plans to announce preliminary voting results at the Special Meeting and report final results in a Current Report on Form 8-K with the SEC and Canadian securities regulators within four business days of the meeting's conclusion or when final results are known.

Key Dates

Keywords

ProMIS Neurosciences, Share Consolidation, Reverse Stock Split, Nasdaq Listing, SEC Filing, Proxy Statement, Corporate Governance, Investor Relations, PMN