ReShape Lifesciences Announces 1-for-58 Reverse Stock Split
Rhea-AI Summary
ReShape Lifesciences Inc. (Nasdaq: RSLS) has announced a 1-for-58 reverse stock split of its common stock, effective for trading on September 23, 2024. This decision, approved by stockholders on February 23, 2024, will convert every 58 shares of issued and outstanding common stock into one share. The reverse split will also affect the company's outstanding warrants, stock options, and convertible preferred stock proportionally. Fractional shares will be rounded up, and the number of authorized shares will remain unchanged. Stockholders will receive instructions from Equiniti Trust Company, regarding the exchange of existing certificates. The new CUSIP number for RSLS common stock post-split will be 76090R309.
Positive
- Potential to maintain Nasdaq listing compliance by increasing share price
- Stockholder approval obtained for the reverse stock split
- Fractional shares will be rounded up, benefiting shareholders
Negative
- Significant reduction in the number of outstanding shares
- Possible short-term stock price volatility following the split
- Risk of not achieving desired share price levels post-split
Insights
ReShape Lifesciences' 1-for-58 reverse stock split is a significant move that could have mixed implications for investors. This action is often undertaken to boost share price and maintain Nasdaq listing compliance. However, it doesn't change the company's underlying value or market capitalization. The split may reduce liquidity and potentially increase volatility in the short term. Investors should note that while the share count will decrease, the authorized share count remains unchanged, which could allow for future dilution. The
This reverse split could be viewed as a defensive strategy by ReShape Lifesciences to maintain its Nasdaq listing and attract institutional investors who often have minimum share price requirements. However, it's important to understand that reverse splits are often perceived negatively by the market. The 1-for-58 ratio is unusually high, which might signal significant challenges. Post-split, we may see increased short-term volatility as the market reacts and adjusts. The company's description as the "premier physician-led weight loss and metabolic health solutions company" should be scrutinized against its financial performance and market position. Investors should watch for any accompanying strategic announcements or turnaround plans that could justify this drastic measure.
From a legal perspective, ReShape Lifesciences has followed proper procedures by obtaining shareholder approval for the reverse split at their annual meeting. The company is also ensuring transparency by providing clear instructions to stockholders regarding the exchange of certificates. However, investors should be aware that reverse splits can sometimes precede delisting notices or indicate financial distress. The maintenance of the current authorized share count could be a legal strategy to maintain flexibility for future financing or acquisitions without requiring additional shareholder votes. Shareholders should review the company's recent SEC filings to fully understand the legal and financial context of this decision, including any risk factors or ongoing legal matters that might have influenced this move.
Effective as of Commencement of Trading on September 23, 2024
IRVINE, Calif., Sept. 19, 2024 (GLOBE NEWSWIRE) -- ReShape Lifesciences Inc. (Nasdaq: RSLS), the premier physician-led weight loss and metabolic health solutions company, today announced that its Board of Directors has declared a 1-for-58 reverse stock split of the company’s common stock, which will be effective for trading purposes upon the commencement of trading on September 23, 2024. At that time, each 58 shares of issued and outstanding common stock and equivalents will be converted into one share of common stock. As a result of the reverse stock split, proportional adjustments will be made to the number of shares of common stock issuable upon exercise or conversion, and the per share exercise or conversion price of the company’s outstanding warrants, stock options and convertible preferred stock, in each case in accordance with their terms. Any fractional shares of common stock resulting from the reverse stock split will be rounded up to the nearest whole share. The number of authorized shares of common stock and preferred stock under the company’s certificate of incorporation will not be reduced in connection with the reverse stock split.
The reverse stock split was approved by ReShape Lifesciences’ stockholders at the company’s annual meeting of stockholders held on February 23, 2024. ReShape Lifesciences stockholders will receive instructions from the company’s transfer agent, Equiniti Trust Company, LLC, as to procedures for exchanging existing stock certificates for new certificates or book-entry shares. The new CUSIP number for the company’s common stock following the reverse stock split will be 76090R309.
About ReShape Lifesciences Inc.
ReShape Lifesciences® is America’s premier weight loss and metabolic health-solutions company, offering an integrated portfolio of proven products and services that manage and treat obesity and metabolic disease. The FDA-approved Lap-Band® System provides minimally invasive, long-term treatment of obesity and is an alternative to more invasive surgical stapling procedures such as the gastric bypass or sleeve gastrectomy. The investigational Diabetes Bloc-Stim Neuromodulation™ (DBSN™) system utilizes a proprietary vagus nerve block and stimulation technology platform for the treatment of type 2 diabetes and metabolic disorders. The Obalon® balloon technology is a non-surgical, swallowable, gas-filled intra-gastric balloon that is designed to provide long-lasting weight loss. For more information, please visit www.reshapelifesciences.com.
Contacts
ReShape Lifesciences Investor Contact:
Paul F. Hickey
President and Chief Executive Officer
949-276-7223
ir@ReShapeLifesci.com
Investor Relations Contact:
Rx Communications Group
Michael Miller
917-633-6086
mmiller@rxir.com
139996032.1
FAQ
What is the reverse stock split ratio for ReShape Lifesciences (RSLS)?
When will the ReShape Lifesciences (RSLS) reverse stock split take effect?
Will the ReShape Lifesciences (RSLS) reverse split affect outstanding warrants and options?
What is the new CUSIP number for ReShape Lifesciences (RSLS) stock after the reverse split?
