Elevai Labs Inc. (NASDAQ:ELAB), a pharmaceutical preparations company, announced a significant change to its stock structure with a 1-for-200 reverse stock split effective today. This strategic move was first approved by the board on July 23, 2024, with a range between 1:2 and 1:10, and later expanded to a range up to 1:200. Following stockholder approval on August 12, 2024, the final ratio was determined by the CEO on November 20, 2024.
The reverse stock split automatically converted every 200 shares of issued and outstanding common stock into one share. The par value of the common stock remains unchanged at $0.0001 per share. To avoid fractional shares, stockholders who would have received a fraction of a share instead received one whole share of common stock.
This corporate action took effect on the Nasdaq Capital Market at the opening of the market today, with the common stock trading under the existing ticker symbol "ELAB" and a new CUSIP number, 28622K 203. The reverse split also led to adjustments in the company's equity incentive plan, modifying the numbers of shares available for future grants and the terms of outstanding awards, including the exercise price of stock options.
Elevai Labs, previously known as Reactive Medical (TASE:PMCN) Labs Inc., underwent a name change on January 14, 2021, and is incorporated in Delaware. The company's executive offices are located at 120 Newport Center Drive, Suite 250, Newport Beach, CA 92660.
This announcement is based on a press release statement and the company's recent SEC filing.
In other recent news, Elevai Labs Inc. has made significant strides in its operations. The pharmaceutical company has adjusted its shareholder meeting quorum, reducing it from a majority to a third of the voting power of outstanding shares. This change in corporate governance structure could potentially make shareholder meetings more manageable.
Elevai Labs has also been granted an extension by Nasdaq to regain compliance with its minimum bid price requirement. This development provides the company with an opportunity to continue trading on the Nasdaq Stock Market while working towards meeting the exchange's listing standards.
In addition to these corporate changes, Elevai Labs has entered into new executive agreements with key figures and signed a Master Services Agreement with KCRN Research, Inc. to support the development of its obesity and muscle loss treatment, EL-22. The company has also reported promising preclinical findings for its experimental drug EL-32, which could potentially enhance muscle preservation and fat loss in obesity treatments.
Furthermore, Elevai Labs has modified its license agreement with INmune Bio (NASDAQ:INMB) Inc., secured a $200,000 unsecured credit line from NorthStrive Fund II LLP, and announced the formation of two wholly owned subsidiaries. It has also acquired exclusive licensing rights for two novel drug candidates from South Korean company MOA Life Plus Co., Ltd. These are all recent developments from Elevai Labs, indicating a proactive approach to its business operations.
InvestingPro Insights
Elevai Labs Inc.'s recent 1-for-200 reverse stock split comes amid challenging financial circumstances, as revealed by InvestingPro data. The company's market capitalization stands at a modest $6.47 million, reflecting its current struggles. InvestingPro Tips indicate that ELAB is "quickly burning through cash" and "not profitable over the last twelve months," which may have contributed to the decision to implement such a drastic reverse split.
The company's stock performance has been particularly poor, with InvestingPro data showing a staggering 99.69% decline in the 1-year price total return. This aligns with the InvestingPro Tip that the "stock has fared poorly over the last month" and has "taken a big hit over the last week," with a 41.59% drop in the past week alone.
Despite these challenges, ELAB maintains some positive aspects. An InvestingPro Tip highlights the company's "impressive gross profit margins," which is supported by the data showing a 71.15% gross profit margin for the last twelve months. Additionally, ELAB "holds more cash than debt on its balance sheet," potentially providing some financial flexibility as it navigates its current difficulties.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for ELAB, providing a deeper understanding of the company's financial health and market position.
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