Aquabounty has reduced its number of outstanding shares from 71.36 million to 3.57 million.
Land-based salmon farmer AquaBounty has announced a 1-for-20 reverse stock split of its common stock, a move aimed at maintaining compliance with NASDAQ’s minimum closing price requirement.
The modification, announced on Friday, reduces the number of outstanding shares from approximately 71.36 million to about 3.57 million, with the total number of authorized shares also halving from 150 million to 75 million.
The move comes as AquaBounty faced potential delisting from the Nasdaq Stock Market, a threat that could have further plunged the company’s stock price.
The firm, known for its genetically engineered Atlantic salmon and plans to establish multiple recirculating aquaculture system (RAS) facilities, was first notified on Oct. 31, 2022 of potential delisting if its stock didn’t surpass $1 by May 1, 2023.
Although AquaBounty missed that deadline, Nasdaq granted an extension until Oct. 30.
The strategic adjustment is in alignment with NASDAQ Listing Rule stipulations, ensuring AquaBounty’s continued listing on the exchange.
Delisting could have substantially hamper AquaBounty’s ability to raise capital or pursue restructuring efforts.
In June, rising costs prompted AquaBounty to pause its salmon farm construction in Pioneer, Ohio. To lessen delisting threats, the firm has suggested reducing its authorised shares from 150 million to 75 million. A reverse stock split would consolidate shareholders’ existing stock into fewer shares, affecting the stock’s price, not the firm’s actual value.