With the split, the Irvine, Calif.-based company will put a single share of its common stock in the hands of each of its shareholders for every five shares they previously owned, according to a press release.
The split will reduce the company’s outstanding shares from approximately 102.4 million shares to approximately 20.5 million shares, Biolase said. The company will also make adjustments to the number of shares issuable through outstanding equity awards or warrants, with the number of authorized shares slated to be reduced from 200 million to 40 million.
Biolase said that it is initiating the 1-for-5 reverse stock split to maintain the minimum bid price of $1.00 as required by the Nasdaq Capital Market.
“While we can’t guarantee that the 1-for-5 reverse stock split will result in a sustainable increase in the price of our common stock above the Minimum Bid Price, we believe it is in the best interests of our stockholders to take whatever steps are available to us to maintain the trading of our common stock on the Nasdaq Capital Market. Also, our expectation is that the decrease in the number of shares of our outstanding common stock stemming from the reverse stock split, and the anticipated increase in the price per share, could promote greater liquidity for our stockholders with respect to Biolase stock. We also believe that a higher price of our common stock could help improve the marketability of our stock to, and acceptance by, institutional investors, research analysts and other members of the investing public. In addition, if the reverse stock split is successful in helping to produce a sustainable increase in the per share price of our common stock above the minimum bid price, it could enhance our ability to attract and retain employees and service providers,” board chair Dr. Jonathan Lord said in a prepared statement.
Last month, Biolase said that its CEO Harold Flynn resigned from the company to pursue other interests, and that current CFO John Beaver stepped in to act as interim CEO.