Oragenics Inc (NYSEAMERICAN:OGEN) recently announced that a reverse split of its common stock will start $0.01 par value at a ratio 1 for 10 and is expected to improve the perception and appeal of the company’s common stock. Soon after the announcement, the common stock of Oragenics started trading on split-adjusted basis at the opening of the markets on January 22, this year under its existing “OGEN” trading symbol.
With the reverse split coming into practice every 10 pre-split shares of common stock outstanding will automatically transform into a single new share of common stock even though no action has been taken by the holders. Similarly, in this transaction, the number of outstanding common shares will be cut down from around 49 million to around 4.9 million shares. The reverse split policy is also being applied to common stock that will be issued upon exercising the outstanding stock options of the company.
The recently released statement also says that the authorized common stock of Oreganics will decrease from 450 million to 45 million shares. However, the authorized preferred stock will remain steady at 50,000,000 shares. These common stock thus issued through reverse stock split will remain non-assessable and fully paid. The statement also says that the reverse stock split will not in any way affect the common stock’s par value.
Increase In Share Price Due To Reverse Split To Improve Appeal Of Common Stock
The reverse stock split was approved by the board of directors of Oreganics on November 3, 2017, subject to shareholder approval. Since most of the shareholders approved of this move by the company and gave the Board discretionary authority to introduce the reverse stock split, a written consent was passed on December 1, 2017, as per the current bylaws and articles of incorporation of the Company. The final approval was given by the Board on January 8, 2018.
According to CEO and President of Oreganics, Dr. Alan Joslyn the company believes that the resulting increase in the share price from the reverse split will improve perception and appeal of Oreganics common stock to a broader range of investors which in turn will benefit the Company as well as the shareholders.