TAMPA, FL—UPEXI, Inc. (NASDAQ:UPXI), a Nevada-based company specializing in medicinal chemicals and botanical products, disclosed today that its Board of Directors has approved a reverse stock split of its common and preferred stock. The 20-to-1 reverse stock split is set to take effect at 12:01 am ET on October 3, 2024, to align with NASDAQ's minimum share price requirements.
The reverse stock split aims to reduce the number of shares in circulation and increase the per-share price, thereby enabling the company to comply with NASDAQ's listing standards. Upon the effective date, every 20 shares of UPEXI's common and preferred stock will be consolidated into one share. This move will not alter the company's par value per share.
Shareholders holding common stock will see their holdings automatically adjusted to reflect the split. Fractional shares will not be issued; instead, shareholders will receive one whole share for any fraction resulting from the split. The company has confirmed that no cash or other consideration will be paid for fractional shares.
The reverse stock split will also affect all outstanding options, warrants, and convertible securities, which will be adjusted accordingly. The exercise or conversion price of these instruments will be multiplied by 20, as per the terms of the respective agreements.
The company's common stock will continue to trade under the ticker symbol "UPXI" on NASDAQ, but with a new CUSIP number, 39959A205. Stockholders with paper certificates can exchange them for new ones reflecting the reverse stock split through the company's transfer agent, VStock Transfer, though this is not a requirement.
Following the reverse stock split, UPEXI's authorized shares will be reduced to 5,000,000 common shares and 25,000 preferred shares. The issued and outstanding shares will be adjusted to 1,040,886 common shares and 25,000 preferred shares, respectively.
This corporate action, which did not require stockholder approval under Nevada law, was effected through filings with the Nevada Secretary of State on September 11, 2024, and September 18, 2024. The company's fiscal year-end remains on June 30. The reverse stock split is expected to maintain each stockholder's proportionate ownership and voting power, barring minor adjustments for fractional shares.
In other recent news, Upexi, Inc. has made significant strides in its restructuring efforts, reducing its debt by $16.1 million through asset sales and operational consolidation. The company has also bolstered its balance sheet with $7.4 million in cash and saved approximately $1.5 million in operational costs. Upexi's recent transactions include the sale of E-core/Neti and Tytan Tiles, which cut debt by roughly $12 million and added $2 million in cash. The company also sold a Clearwater, Florida warehouse, eliminating around $2.6 million in debt and adding $1.4 million to working capital.
In addition, Upexi is addressing a Nasdaq compliance issue by planning to file the required Form 10-Q. The company is also prioritizing debt reduction and maintaining profitability in its core business areas, with plans for future expansion. As part of its commitment to financial transparency, Upexi has engaged GBQ Partners LLC to audit its financial statements for the fiscal years ending June 30, 2023, and 2024.
These recent developments showcase Upexi's strategic initiatives to consolidate operations, expecting to cut annual operating expenses by $2 to $3 million. The company's management remains confident in Upexi's ability to grow and innovate following these restructuring measures.
InvestingPro Insights
UPEXI'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 $4.3 million, with its stock price having fallen significantly over the past year, down 87.28% according to InvestingPro. This decline aligns with the company's need to boost its share price to meet NASDAQ's minimum requirements.
InvestingPro Tips highlight some of the challenges UPEXI faces. The company is operating with a significant debt burden and may have trouble making interest payments. Additionally, UPEXI is quickly burning through cash, with short-term obligations exceeding liquid assets. These factors likely contributed to the decision to pursue a reverse stock split as a means to maintain its NASDAQ listing and potentially improve its financial position.
It's worth noting that UPEXI's revenue for the last twelve months as of Q3 2024 was $83.98 million, with a revenue growth of 27.11%. However, the company is not currently profitable, as indicated by its negative P/E ratio of -0.37.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for UPEXI, providing a deeper understanding of the company's financial health and market position.
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