RADNOR, Pa. - NRx Pharmaceuticals, Inc. (NASDAQ:NRXP), a clinical-stage biopharmaceutical company, has declared a reverse stock split of its common stock at a ratio of 1-for-10, set to take effect after market close on Monday, April 1, 2024.
The company's common stock will begin trading on a split-adjusted basis on the Nasdaq Capital Market under the same ticker symbol NRXP from Tuesday, April 2, 2024. The reverse stock split is aimed at increasing the market price of the company's common stock, thereby ensuring compliance with Nasdaq's minimum bid price requirement.
In connection with the reverse split, every ten shares of the company's issued and outstanding common stock will be converted into one share. This consolidation will proportionally reduce the number of shares outstanding from approximately 95.7 million to about 9.6 million, subject to rounding adjustments for fractional shares.
Fractional shares resulting from the reverse stock split will be rounded up to the nearest whole number. The par value of the stock will remain unchanged.
The reverse stock split is intended to attract a broader range of institutional investors and lift the company's share price above the levels generally associated with penny stocks.
According to Dr. Jonathan Javitt, Founder, Chairman, and Chief Scientist of NRx Pharmaceuticals, this move aligns with creating long-term shareholder value, especially in light of the company's upcoming clinical trial data and planned New Drug Application (NDA) filing for ketamine.
Stockholders who hold their shares in brokerage accounts will have their holdings automatically adjusted to reflect the reverse stock split. Those holding shares in certificated form have the option, but are not required, to exchange their certificates for new ones.
NRx Pharmaceuticals is focused on developing treatments for central nervous system disorders, including suicidal bipolar depression, chronic pain, and PTSD. It has recently announced plans to submit an NDA for HTX-100 (IV ketamine) for the treatment of suicidal depression.
The information provided here is based on a press release statement from NRx Pharmaceuticals. Investors are cautioned to consider the risks and uncertainties that could affect the company's future performance and the realization of forward-looking statements.
InvestingPro Insights
In the wake of NRx Pharmaceuticals' announcement regarding a reverse stock split, investors are closely monitoring the company's financial health and market performance. According to real-time data from InvestingPro, NRXP's market capitalization stands at a modest $48.63 million, reflecting the challenges faced by smaller biopharmaceutical companies in securing their market positions.
Despite a tough financial situation characterized by an operating income of -$33.07 million for the last twelve months as of Q3 2023, NRXP has experienced a significant price uptick, with a 98.06% return over the last six months.
Adding to the complexity of NRXP's financial landscape, the company's P/E ratio is currently at -1.06, indicating that investors are not valuing the company based on earnings, which is understandable given that analysts do not anticipate NRXP will be profitable this year. This sentiment is further supported by an adjusted P/E ratio of -1.47 for the same period, reinforcing the challenges NRXP faces in achieving profitability.
On the strategic front, two analysts have revised their earnings upwards for the upcoming period, which could be an indicator of potential positive developments in NRXP's pipeline or business operations. However, this optimism must be tempered with caution, as NRXP is quickly burning through cash, has weak gross profit margins, and short term obligations that exceed its liquid assets. Additionally, NRXP does not pay a dividend, which may deter income-focused investors.
For those looking to delve deeper into NRXP's financials and future prospects, InvestingPro offers additional insights and tips. There are numerous InvestingPro Tips available, including the company's moderate level of debt, its non-profitability over the last twelve months, and the strong return over the last month. Interested investors can explore these valuable tips by visiting https://www.investing.com/pro/NRXP and can take advantage of an exclusive offer by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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