AquaBounty pursuing reverse stock split in bid to remain listed on Nasdaq

AquaBounty Technologies is pursuing a reverse stock split at a special meeting of its stockholders as the company’s stock price continues to remain below the USD 1.00 (EUR 0.93) threshold it needs to meet to remain listed on the Nasdaq Stock Market. 

The company, which has developed genetically engineered Atlantic salmon and had “aggressive” plans to develop multiple recirculating aquaculture system (RAS) facilities, was first warned on 31 October, 2022, it would be removed from the market if its share price did not rise above USD 1.00 by 1 May, 2023. At the time, AquaBounty issued a statement saying it planned to take “any reasonable measure” to maintain its Nasdaq listing.

AquaBounty failed to meet the deadline, but the Nasdaq exchange extended a grace period, giving the company until 30 October, 2023, to fulfill its obligation, AquaBounty CFO David Frank told SeafoodSource in early June. 

“Nasdaq determined that we are eligible for the second compliance period due to us meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq capital market, with the exception of the bid price requirement, and our written notice of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary,” Frank said at the time.

Now, with its stock price sitting at USD 0.26 (EUR 0.24), and construction paused at its planned Pioneer, Ohio, U.S.A.-based salmon recirculating aquaculture system (RAS) facility, the company has filed its intentions to pursue a reverse stock split with the U.S. Securities and Exchange Commission (SEC).

In a filing, the company urged its stockholders to vote at a special meeting of stockholders, to be held on 12 October, to pursue a reverse stock split on the common stock to reduce the number of shares of stock from 150 million to 75 million.

“Our board has unanimously approved and declared advisable an amendment to our charter which would effect a reverse stock split of all issued and outstanding shares of our common stock,” the company’s SEC filing said.

The board said that if the reverse stock split is not approved, the company may be delisted from the Nasdaq, which could “substantially limit” the company’s liquidity.

“Delisting from the Nasdaq capital market could also have other negative results, including the potential loss of institutional investor interest, fewer business development opportunities, and the inability to raise additional required capital,” the company said in its SEC filing.

The company said the SEC has rules on “penny stocks” – or low-value stocks – that could put additional burdens on the company.

“In the event of a delisting, we would attempt to take actions to restore our compliance with the Nasdaq capital market’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again,” the company said. 

The company’s stock price briefly rose above the USD 1.00 threshold in late January 2023, but did not sit above the threshold for long enough to meet Nasdaq requirements. Since that time, the stock has been on a downward trend.  

Image courtesy of AquaBounty Technologies