NEW YORK - Seelos Therapeutics, Inc. (NASDAQ:SEEL), a clinical-stage biopharmaceutical company, announced a 1-for-8 reverse stock split of its common stock, set to take effect at the start of trading on Thursday, May 16, 2024. The reverse stock split was approved by the company's Board of Directors and is aimed at regaining compliance with Nasdaq's minimum bid price requirement.
Upon implementation, the reverse stock split will convert every eight existing shares of Seelos Therapeutics' common stock into one share. This action will not alter the par value per share but will decrease the number of authorized shares from 400 million to 50 million. The number of issued and outstanding shares will be reduced from approximately 17.4 million to roughly 2.2 million. Stockholders' ownership percentages will remain unchanged except for adjustments due to rounding up fractional shares to the nearest whole share.
The company's common stock will continue trading on the Nasdaq Capital Market under the ticker "SEEL" with a new CUSIP number, 81577F307. The reverse stock split will also affect the company's outstanding warrants and stock options, with exercise prices and equity incentive plans to be adjusted accordingly.
Seelos Therapeutics focuses on developing therapies for central nervous system disorders and rare diseases. Its portfolio includes late-stage clinical assets targeting conditions such as Acute Suicidal Ideation and Behavior in Major Depressive Disorder, amyotrophic lateral sclerosis, and spinocerebellar ataxia, with early-stage programs for Huntington's disease, Alzheimer's disease, and Parkinson's disease.
The company has issued forward-looking statements regarding the reverse stock split's potential impact on the bid price of its common stock and its ability to satisfy Nasdaq's listing requirements. However, these expectations are subject to market conditions and other factors that could cause actual results to differ.
This news article is based on a press release statement from Seelos Therapeutics, Inc.
InvestingPro Insights
As Seelos Therapeutics, Inc. (NASDAQ:SEEL) approaches its reverse stock split, a closer look at the company's financial health and market performance through InvestingPro data reveals a challenging landscape. The company's market capitalization stands at a modest 3.63 million USD, reflecting the market's current valuation of the biopharmaceutical firm. The revenue for the last twelve months as of Q4 2023 is reported at 2.2 million USD, which, while indicative of the company's operational scale, is overshadowed by a gross profit margin of -1267.09%, suggesting substantial costs relative to revenue.
InvestingPro Tips highlight several points of concern for investors. The stock's recent performance has been notably poor, with a 1-week price total return of -6.46% and a staggering 1-year price total return of -98.92%, positioning the stock near its 52-week low. This performance aligns with the company's announcement of a reverse stock split, which is often viewed as a measure to improve stock marketability and compliance with exchange listing requirements. Additionally, the Relative Strength Index (RSI) suggests that the stock is currently in oversold territory, which could be of interest to potential investors looking for entry points.
For those considering a deeper dive into Seelos Therapeutics' potential, InvestingPro offers a comprehensive list of additional tips that can provide further guidance. Currently, there are 16 InvestingPro Tips available for SEEL at https://www.investing.com/pro/SEEL, offering insights into sales growth expectations, profitability projections, and stock price volatility. Readers looking to access these detailed analytics can take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
With the next earnings date slated for May 16, 2024, investors and stakeholders will be keen to assess the impact of the reverse stock split and the company's strategic initiatives on its financial and market performance.
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