On November 28, 2022 DURECT Corporation (Nasdaq: DRRX), a biopharmaceutical company focused on developing epigenetic regulator programs for the treatment of acute organ injury and chronic liver diseases, reported that DURECT’s board of directors today determined that the Company will effect a reverse stock split at a ratio of 1-for-10 as of 5:01 p.m. Eastern Time on December 5, 2022 (Press release, DURECT, NOV 28, 2022, View Source [SID1234624518]). Beginning with the opening of trading on December 6, 2022, the Company’s common stock will trade on a split-adjusted basis.
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At a Special Meeting of Stockholders held on November 22, 2022, DURECT stockholders voted to approve a proposal authorizing the board of directors of the Company to amend the Company’s certificate of incorporation to effect a reverse stock split of DURECT’s outstanding common shares at an exchange ratio of not less than 1-for-10 and not greater than 1-for-20, and a reduction in the number of authorized shares of common stock from 600,000,000 to 150,000,000 shares. The reduction in the authorized number of shares will also be effective as of 5:00 p.m. Eastern Time on December 5, 2022.
"We appreciate the support of our shareholders in granting our board the authority to effect a reverse split. After in-depth consideration of our options, the board determined that a reverse split of the Company’s common shares is in the best interest of shareholders," said James E. Brown, D.V.M., President and Chief Executive Officer of DURECT. "Implementing the reverse stock split will help us maintain compliance with Nasdaq’s $1.00 minimum bid price requirement and potentially make our stock more attractive to a broader range of institutional and other investors."
Upon the effectiveness of the reverse stock split, each ten shares of the Company’s issued and outstanding common stock will be automatically combined and converted into one issued and outstanding share of common stock, par value $0.0001 per share. As a result of the reverse split, there will be approximately 22.8 million shares of common stock issued and outstanding. The reverse stock split will not materially affect any shareholder’s ownership percentage of DURECT’s common shares. Any fraction of a share of common stock that would be created as a result of the Reverse Stock Split will be cashed out at a price equal to the product of the closing price of the Company’s common stock on December 5, 2022 and the amount of the fractional share. In addition, proportionate adjustments will be made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options.
The Company’s common stock will continue to trade on The Nasdaq Stock Market LLC ("Nasdaq") under the symbol "DRRX." The common shares will trade under a new CUSIP number, 266605 500, effective December 6, 2022.
Computershare has been appointed by the Company to act as its exchange agent for the Reverse Stock Split. Stockholders owning pre-split shares via a bank, broker or other nominee will have their positions automatically adjusted to reflect the Reverse Stock Split and will not be required to take further action in connection with the Reverse Stock Split, subject to brokers’ particular processes. Similarly, registered stockholders holding pre-split shares of the Company’s common stock electronically in book-entry form are also not required to take further action in connection with the Reverse Stock Split. Holders of certificated shares will be contacted by the Company or its exchange agent with further details about how to surrender old certificates.