LONDON - Akanda Corp. (NASDAQ: AKAN), a cannabis cultivation, manufacturing, and distribution company, has announced a 1-for-2 reverse stock split of its common shares, which is set to take effect at the market opening on November 14, 2024. This corporate action follows a previous 1-for-40 reverse split that took place on May 23, 2024, and is part of a strategic initiative approved by shareholders and the Board of Directors to potentially conduct further consolidations within a specified range.
The reverse stock split will decrease the number of Akanda's outstanding common shares from approximately 4.1 million to approximately 2.0 million, maintaining the proportionate equity interests of shareholders, barring minor adjustments due to the rounding down of fractional shares. No fractional shares will be issued, and no cash will be paid in lieu of fractional shares post-reverse split.
Shareholders holding stock certificates will receive instructions from Vstock Transfer, the exchange agent, on exchanging their certificates. Shareholders with book-entry shares or those holding shares through a bank, broker, or other nominee will see the impact of the reverse stock split reflected in their accounts after November 14, 2024, without the need for any action on their part. Outstanding company options, warrants, and convertible securities will be adjusted accordingly.
The reverse stock split aims to comply with Nasdaq's continued listing standards, although the company has made forward-looking statements regarding its ability to maintain its listing and comply with Nasdaq standards. The new CUSIP number for Akanda's common shares will be 00971M403, and the new ISIN code will be CA00971M4039.
This news is based on a press release statement and further details regarding the reverse stock split can be found in the company's filings with the Securities and Exchange Commission. Akanda's mission remains to provide premium quality medical cannabis products to patients worldwide, as it seeks to expand its operations and develop sales channels in international markets.
In other recent news, Akanda Corp., an international medical cannabis company, has secured $1.5 million through an underwritten public offering in a deal with Univest Securities, LLC. The company plans to allocate the net proceeds to various corporate activities, including capital expenditures, enhancing operational capacity, general corporate purposes, and potential acquisitions. In another development, Akanda has been granted a hemp cultivation license in Canada, which aligns with its strategic partnership with 1107385 B.C. LTD. This move is a significant step in its expansion within the Canadian market and allows Akanda to develop THC and cannabinoid facilities on a farming property in British Columbia. These recent developments are part of Akanda's ongoing efforts to expand its global footprint in the cannabis sector. As always, investors are advised to follow the company's progress and announcements for the latest information. Please note, these are recent developments and actual results may differ from projections.
InvestingPro Insights
Akanda Corp.'s recent announcement of a 1-for-2 reverse stock split comes amid challenging financial circumstances, as revealed by InvestingPro data. The company's market capitalization stands at a modest $2.18 million, reflecting its current struggles in the cannabis industry. This move appears to be a strategic effort to maintain Nasdaq listing compliance, which is crucial for the company's visibility and access to capital markets.
InvestingPro Tips highlight that Akanda is "quickly burning through cash" and "suffers from weak gross profit margins." These insights are particularly relevant given the company's recent corporate actions. The gross profit margin of 10.35% for the last twelve months as of Q2 2024 underscores the profitability challenges Akanda faces in its operations.
Moreover, the company's stock performance has been concerning, with InvestingPro data showing a staggering year-to-date price total return of -95.66% as of the latest available data. This aligns with another InvestingPro Tip stating that the "stock price movements are quite volatile," which may explain the need for consecutive reverse stock splits.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide deeper insights into Akanda's financial health and market position. These additional tips could be particularly valuable in understanding the full implications of the company's strategic decisions and future prospects in the competitive cannabis industry.
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