Athersys Inc., the Cleveland-based regenerative medicine company, said it plans to do a 1-for-25 reverse stock split after the close of trading on Friday.
On July 28, shareholders approved a reverse stock split within a range of 1:15 to 1:30 primarily to bring Athersys into compliance with Nasdaq’s minimum bid price requirement, the company said in a statement.
The last time Athersys shares traded for more than $1 was Feb. 2, according to Yahoo Finance.
The reverse split, which will consolidate 25 of the company's outstanding shares into one share, will take effect on Monday morning, Athersys said.
Shareholders will receive the value of fractional shares in cash, Athersys said.
The company's board said in a regulatory filing that the reverse stock split could:
- Better enable Athersys to maintain its stock listing on the Nasdaq Stock Market.
- Facilitate higher levels of stock ownership among institutions, which generally prohibit investments in lower-priced securities.
- Better enable the company to restructure itself and raise funds to finance its planned operations.
Athersys leadership has dealt with several challenges this year, ranging from reporting clinical results that disappointed some investors, causing a 66% drop in the company's share price, to losing its $100 million equity purchase agreement with Aspire Capital Fund LLC.
On Aug. 15, Athersys said it could raise up to $12 million by selling shares and warrants to "a single healthcare-focused U.S. institutional investor."
In June, the company announced plans to cut its workforce by as much as 70% in a restructuring aimed at reducing costs and making it an attractive investment for potential financial or strategic partners.
Athersys shares (Nasdaq: ATHX) fell 2.3% to 17.5 cents during Thursday trading. The company announced the reverse stock split after the market closed for the day.
The company's shares were down an additional 10.8% to 15.5 cents — an all-time low — in after-market trading on Thursday.
