Conduit Pharmaceuticals Inc. Announces Reverse Stock Split
Rhea-AI Summary
Conduit Pharmaceuticals (Nasdaq: CDT) has announced a 1-for-100 reverse stock split effective January 24, 2025, at 5:00 pm Eastern Time. The company's common stock will begin trading on a split-adjusted basis on Nasdaq on January 27, 2025, maintaining its 'CDT' ticker symbol.
The reverse split aims to increase the stock price to meet Nasdaq's $1.00 minimum bid price requirement for continued listing. Every 100 shares will be combined into one share, reducing outstanding shares to approximately 1.5 million. The par value remains at $0.0001 per share.
Proportional adjustments will be made to equity awards, convertible securities, and warrants. VStock Transfer, will serve as the exchange agent. No fractional shares will be issued, with stockholders entitled to fractional shares receiving proportional cash payments.
Positive
- Potential compliance with Nasdaq's minimum bid price requirement, avoiding delisting risk
- No action required from shareholders holding shares in brokerage accounts
Negative
- Significant share consolidation (100:1) indicating severe price decline
- Risk of not achieving or maintaining the $1 minimum bid price despite the reverse split
- Potential reduced stock liquidity due to fewer outstanding shares
Insights
Conduit Pharmaceuticals' announcement of a 1-for-100 reverse stock split signals significant challenges for the company and its shareholders. This drastic ratio selection - among the more severe seen in biotech - suggests deep concerns about the company's ability to maintain its Nasdaq listing. While mathematically neutral, reverse splits historically carry negative implications, with research showing that companies implementing them often underperform the market in subsequent periods.
The reduction to approximately 1.5 million outstanding shares post-split creates a notably tight float, which could lead to increased volatility. Investors should recognize that while this corporate action may temporarily lift the share price above Nasdaq's minimum bid requirement, it doesn't address the underlying fundamental issues that led to the price decline. Notably, the timing - immediately following shareholder approval from December - indicates urgency in maintaining the listing.
Critical considerations for investors include:
- Potential increased volatility due to the reduced float
- Risk of future dilution through additional equity raises
- Market perception challenges, as reverse splits often signal financial distress
- Compliance clock reset for Nasdaq listing requirements
For existing shareholders, while their ownership percentage remains unchanged, the psychological impact and trading dynamics will shift significantly. Historical patterns suggest that companies resorting to reverse splits, particularly in the biotech sector, often struggle to maintain their post-split price levels without substantial fundamental improvements in their business outlook.
NAPLES, Fla. and CAMBRIDGE, United Kingdom, Jan. 23, 2025 (GLOBE NEWSWIRE) -- Conduit Pharmaceuticals Inc. (Nasdaq: CDT) (“Conduit” or the “Company”), a multi-asset, clinical stage, disease-agnostic life science company delivering an efficient model for compound development, announces that its board of directors has approved a 1-for-100 reverse stock split of the Company’s common stock. The Company’s stockholders approved the reverse stock split proposal at the Company’s Annual Meeting of Stockholders held on December 18, 2024. They granted the board of directors the authority to determine the exact split ratio and when to proceed with the reverse stock split.
The reverse stock split will become effective on January 24, 2025 at 5:00 pm, Eastern Time (the “Effective Time”), and the Company’s common stock is expected to begin trading on a reverse stock split-adjusted basis on The Nasdaq Global Market (“Nasdaq”) on January 27, 2025 at market open under the existing ticker symbol, “CDT.” The reverse stock split is intended to increase the price per share of the Company’s common stock to allow the Company to demonstrate compliance with the
As of the Effective Time, every 100 shares of the Company’s issued and outstanding common stock will be combined into one share of common stock. The par value per share of the Company’s common stock will remain unchanged at
The Company’s common stock will continue to trade on The Nasdaq Stock Market under the symbol “CDT” following the reverse stock split, with a new CUSIP number of 20678X205. After the effectiveness of the reverse stock split, the number of outstanding shares of common stock will be reduced to approximately 1.5 million. No fractional shares will be issued in connection with the reverse stock split, and stockholders who would otherwise be entitled to a fractional share will receive a proportional cash payment.
The Company’s transfer agent, VStock Transfer, LLC, will serve as the exchange agent for the reverse stock split. Registered stockholders holding pre-reverse stock split shares of common stock electronically in book-entry form are not required to take any action to receive post-reverse stock split shares. Those stockholders who hold their shares in brokerage accounts or in “street name” will have their positions automatically adjusted to reflect the reverse stock split, subject to each broker’s particular processes, and will not be required to take any action in connection with the reverse stock split.
Additional information about the reverse stock split can be found in the Company’s definitive proxy statement filed with the Securities and Exchange Commission on October 28, 2024, a copy of which is available at www.sec.gov.
About Conduit Pharmaceuticals
Conduit is a multi-asset, clinical stage, disease-agnostic life science company delivering an efficient model for compound development. Conduit both acquires and funds the development of Phase 2-ready assets and then seeks an exit through third-party license deals following successful clinical trials. Led by a highly experienced team of pharmaceutical executives including Dr. David Tapolczay and Dr. Freda Lewis-Hall, this novel approach is a departure from the traditional pharma/biotech business model of taking assets through regulatory approval.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical facts contained in this press release, including statements regarding Conduit’s future results of operations and financial position, Conduit’s business strategy, prospective product candidates, product approvals, research and development costs, timing and likelihood of success, plans and objectives of management for future operations, future results of current and anticipated studies and business endeavors with third parties, and future results of current and anticipated product candidates, are forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, but not limited to: the effect that the reverse stock split may have on the price of the Company’s common stock; the ability or inability to maintain the listing of Conduit’s securities on Nasdaq; the ability to recognize the anticipated benefits of the business combination completed in September 2023, which may be affected by, among other things, competition; the ability of the combined company to grow and manage growth economically and hire and retain key employees; the risks that Conduit’s product candidates in development fail clinical trials or are not approved by the U.S. Food and Drug Administration or other applicable authorities on a timely basis or at all; changes in applicable laws or regulations; the possibility that Conduit may be adversely affected by other economic, business, and/or competitive factors; and other risks as identified in filings made by Conduit with the U.S. Securities and Exchange Commission. Moreover, Conduit operates in a very competitive and rapidly changing environment. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond Conduit’s control, you should not rely on these forward-looking statements as predictions of future events. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and except as required by law, Conduit assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. Conduit gives no assurance that it will achieve its expectations.
Investors
Conduit Pharmaceuticals Inc.
Info@conduitpharma.com
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