Danimer Scientific, Inc. (NYSE:DNMR), a company specializing in biodegradable materials, announced the approval of a reverse stock split by its stockholders during a Special Meeting held on Wednesday. The reverse stock split will consolidate existing shares of common stock into a smaller number of shares at a ratio ranging from 1-for-20 to 1-for-40, as determined by the Board of Directors.
The decision to effect the reverse stock split was voted on by approximately 56% of the total shares entitled to vote, with 63,069,760 votes in favor, 4,414,588 against, and 613,897 abstentions. The exact ratio within the approved range will be set by the Board and subsequently communicated in a public announcement.
This corporate action is part of an amendment and restatement of Danimer Scientific’s Fifth Amended and Restated Certificate of Incorporation. The reverse stock split is intended to be executed at the discretion of the Board of Directors without requiring further approval from the company's stockholders.
The approval of the reverse stock split comes as part of the company's efforts to comply with the New York Stock Exchange's trading and performance standards.
The filing with the Securities and Exchange Commission (SEC) also included the company’s Exhibit 104, which contains the Cover Page Interactive Data File within the Inline XBRL document. This filing ensures that Danimer Scientific adheres to the SEC's transparency requirements for public companies.
The article is based on an 8K filing.
In other recent news, Danimer Scientific has seen significant changes in its executive leadership and financial landscape. The company's CEO, Stephen Croskrey, has stepped down and Richard Altice has been appointed as the Interim CEO.
Croskrey will continue to serve as a Special Advisor until year-end and remain on the Board. Altice, a veteran in the biopolymers industry, has been granted 300,000 Stock Appreciation Rights as part of his interim role.
In terms of financial developments, Danimer Scientific reported an increase in Q3 2024 revenue to $6.7 million, a $0.8 million rise from the previous quarter, largely due to a 20-million-pound cutlery contract in the quick service restaurant sector.
Additionally, the company has been awarded a $1.36 million contract by the U.S. Department of Defense to develop biobased polyols for high-performance coatings, a development that could potentially lead to the construction of a U.S. manufacturing facility.
However, analyst firms TD Cowen and Jefferies have downgraded the company's stock from Buy to Hold, with TD Cowen reducing the price target to $1 and Jefferies to $0.80. These changes follow slower-than-expected growth at the company's Kentucky facility and the announcement of a CEO transition.
Amid these developments, Danimer Scientific's stockholders approved an amendment to increase the authorized shares of Class A common stock from 200 million to 600 million. These are the recent developments concerning Danimer Scientific.
InvestingPro Insights
Danimer Scientific's decision to implement a reverse stock split comes at a critical time for the company, as reflected in recent InvestingPro data. The company's market capitalization stands at a modest $48.54 million, with its stock price having fallen significantly over the past year, down 73.21% according to InvestingPro metrics. This context underscores the urgency of the reverse split strategy to boost share price and maintain NYSE listing compliance.
InvestingPro Tips highlight that Danimer is currently trading at a low Price / Book multiple of 0.21, which could be seen as an opportunity for value investors. However, this must be weighed against the company's financial challenges. An InvestingPro Tip notes that Danimer "operates with a significant debt burden" and is "quickly burning through cash," which aligns with the company's efforts to improve its financial position through the reverse split.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips that could provide valuable insights into Danimer Scientific's financial health and market position.
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