BAINBRIDGE, Ga. - Danimer Scientific, Inc. (NYSE: DNMR), a biotechnology company specializing in biomaterials, has announced a 1-for-40 reverse stock split of its Class A common stock. The move, approved by both stockholders and the Board of Directors, is aimed at increasing the share price to comply with the New York Stock Exchange's minimum price requirements.
The reverse stock split is set to take effect after the market closes on November 12, 2024, with shares expected to trade on a split-adjusted basis from the opening of the market on November 13, 2024. The company's stock will continue trading under the ticker symbol "DNMR" with a new CUSIP number.
This corporate action will convert every 40 shares of issued and outstanding common stock into one share. Stockholders who would receive fractional shares will be compensated with a cash payment instead. The reverse stock split will apply uniformly to all stockholders and is not expected to materially alter any stockholder's percentage interest in the company, aside from adjustments due to the treatment of fractional shares.
Additionally, proportional adjustments will be made to the number of shares underlying Danimer's outstanding equity awards, warrants, and the shares issuable under its equity incentive plans. The company's warrants listed on the OTCQX market will continue to trade under the symbol "DNMRW" with the existing CUSIP.
Danimer's authorized shares of common stock and par value will remain unchanged by the reverse stock split. The company has appointed Continental Stock Transfer and Trust Company as the exchange agent for the process.
Stockholders holding shares electronically in book-entry form or through brokerage accounts will not need to take any action, as the changes will be adjusted automatically.
The company has provided additional details about the reverse stock split in its definitive proxy statement filed with the SEC on September 23, 2024.
This news is based on a press release statement from Danimer Scientific, Inc.
In other recent news, Danimer Scientific has successfully defended itself in a legal battle, with the United States Court of Appeals upholding the dismissal of a class action lawsuit. The company has also reported a rise in Q3 2024 revenue to $6.7 million, largely due to a 20-million-pound cutlery contract. Additionally, Danimer Scientific secured a $1.36 million contract from the U.S. Department of Defense to develop biobased polyols for high-performance coatings.
In corporate actions, the company's stockholders approved a reverse stock split and an amendment to increase the authorized shares of Class A common stock from 200 million to 600 million. Meanwhile, Stephen Croskrey has stepped down as CEO, with Richard Altice stepping in as the Interim CEO. However, analyst firms TD Cowen and Jefferies have downgraded the company's stock from Buy to Hold, following slower-than-expected growth at the company's Kentucky facility and the announcement of a CEO transition. These are the recent developments concerning Danimer Scientific.
InvestingPro Insights
Danimer Scientific's decision to implement a 1-for-40 reverse stock split comes at a critical time for the company, as reflected in recent InvestingPro data. The company's market capitalization stands at a modest $40.2 million, with its stock price having fallen significantly over the past year. InvestingPro Tips indicate that DNMR's stock has taken a big hit over the last week and six months, with a one-year price total return of -75.6%.
The reverse split appears to be a necessary move to maintain NYSE listing compliance, given that the stock is currently trading at only 17.82% of its 52-week high. This aligns with an InvestingPro Tip highlighting that the stock price has performed poorly over the last decade.
Financial challenges are evident, with the company operating under a significant debt burden and quickly burning through cash. The last twelve months' revenue of $39.74 million is coupled with a concerning gross profit margin of -61.46%, underscoring the company's struggle with profitability. An InvestingPro Tip notes that analysts do not anticipate the company will be profitable this year.
Despite these challenges, there are some positive signals. Two analysts have revised their earnings upwards for the upcoming period, suggesting potential improvements. Additionally, the company's liquid assets exceed short-term obligations, providing some financial flexibility.
For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips for Danimer Scientific, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.