TORONTO - Electra Battery Materials Corporation (NASDAQ: ELBM; TSX-V: ELBM), a company specializing in the processing of low-carbon, ethically-sourced battery materials, has announced a reverse share split to be effective as markets close on December 31, 2024. The company's stock, currently trading at $0.48, has shown strong momentum with a 31% gain over the past week. According to InvestingPro analysis, ELBM currently appears undervalued based on its Fair Value assessment, with analysts setting price targets ranging from $0.98 to $1.40. This corporate action will convert every four existing common shares into one new common share. The reverse split is aimed at regaining compliance with Nasdaq's minimum bid price requirement of $1.00 per share.
The company's common shares will begin trading on a post-reverse split basis at the opening of markets on January 2, 2025, under the unchanged ticker 'ELBM' and with a new CUSIP number: CA28474P7065. Prior to the reverse split, Electra Battery Materials has 59,213,423 common shares issued and outstanding. Post-split, it is expected to have approximately 14,803,355 common shares.
Shareholders approved the reverse split during a special meeting held on December 20, 2024. The company believes that the increased share price may attract individual and institutional investors who typically avoid investing in 'penny stocks' due to minimum share price thresholds. With a market capitalization of $27.6 million and an overall Financial Health score rated as 'FAIR' by InvestingPro, the company faces both challenges and opportunities. Subscribers to InvestingPro can access 10 additional key insights about ELBM's financial position and growth prospects.
In addition to the share consolidation, the exercise price and number of common shares issuable upon the exercise of the company’s outstanding options, warrants, and other convertible securities will be proportionally adjusted. Fractional shares resulting from the reverse split will be rounded up to the nearest whole number.
Registered shareholders will receive a letter of transmittal with instructions on how to exchange their pre-split shares for post-split shares. Those holding shares through brokerages may have different procedures and are advised to contact their respective brokers for details.
The reverse split is part of Electra's strategy to onshore the electric vehicle supply chain in North America and to provide North American solutions for EV battery materials refining. The company's financial position shows significant debt of $40 million and rapid cash burn, highlighting the importance of this strategic repositioning. InvestingPro subscribers can access detailed analysis of the company's cash flow metrics and debt structure to better understand its growth trajectory. The company is currently focused on developing North America's only cobalt sulfate refinery and is exploring the production potential of nickel sulfate within the continent.
This news article is based on a press release statement from Electra Battery Materials Corporation.
In other recent news, Electra Battery Materials Corporation has witnessed several significant developments. The company announced the appointment of Marty Rendall as the new Chief Financial Officer, effective January 1, 2025, succeeding David Allen. Rendall brings a wealth of experience from his tenure at Victoria Gold, where he was instrumental in growing the company into a leading Canadian gold producer.
Electra has also secured a non-binding term sheet for $5 million in financing for early development work at its Ontario Refinery project. This funding is expected to advance the final phase of construction for North America's only cobalt sulfate refinery.
In partnership with Indigenous-owned Three Fires Group, Electra established Aki Battery Recycling for the production of battery black mass from lithium-ion battery scrap, a move expected to reintroduce recovered minerals into the supply chain.
Furthermore, the company secured a $20 million non-binding term sheet from a strategic partner and a $20 million grant from the U.S. Department of Defense for the completion of its cobalt refinery. However, in its first-quarter financials for 2024, Electra reported a net loss of C$12.2 million, leading analyst firm H.C. Wainwright to lower its price target while maintaining a Buy rating on the company's stock.
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