REDMOND, Ore. - Expion360 Inc. (NASDAQ: XPON), a company specializing in lithium-ion battery power storage solutions, has announced a 1-for-100 reverse stock split of its common stock. The action, approved by the Board of Directors and stockholders, is set to take effect at the close of business today, with trading on a post-split basis beginning Tuesday, October 9, 2024, on The Nasdaq Capital Market.
This strategic move aims to bring the company into compliance with Nasdaq's minimum bid price requirement. At the time of the reverse stock split, every 100 shares of issued and outstanding common stock will be converted into one share, maintaining the original par value of $0.001 per share. Stockholders will not receive fractional shares; instead, they will be issued one whole share in lieu of any fractional share they would have received.
The reverse stock split will also proportionally adjust the number of shares issuable under the company's equity awards, warrants, and non-plan options, along with the associated exercise and conversion prices.
Pacific Stock Transfer Company is acting as the transfer and exchange agent for the reverse stock split. Shareholders holding certificated shares will be contacted with instructions on exchanging their certificates. Those with book-entry shares or shares in brokerage accounts will see their accounts automatically adjusted to reflect the reverse stock split.
Expion360, headquartered in Redmond, Oregon, has made a name for itself in the market for lithium iron phosphate batteries, commonly used in recreational vehicles and marine applications, with plans to expand into residential and industrial sectors. The company touts the superior design and materials of its batteries, claiming increased power, weight efficiency, and reliability over traditional lead-acid batteries.
The company's announcement is based on a press release statement and comes amid efforts to maintain its listing status on a major stock exchange, a common practice among public companies facing similar compliance challenges.
In other recent news, Expion360 Inc. has made several strategic moves. The company terminated a significant commercial lease agreement early, aiming to reduce costs and streamline operations. This decision is part of a broader initiative to implement cost-saving opportunities, with anticipated savings of approximately $40,000 per month over the next 51 months.
Expion360 has also announced the outcomes of its Annual Meeting of Stockholders, which included the election of five directors and the ratification of a reverse stock split. However, the proposal to reduce the number of authorized shares was not approved. The company also priced its public offering with the goal of raising approximately $10 million, which is intended to repay outstanding debt and provide working capital for general corporate purposes.
Additionally, Expion360 has unveiled its innovative Edge battery, featuring advanced internal heating technology known as Vertical Heat Conduction™, and real-time monitoring capabilities facilitated by Integrated SmartTalk™ Bluetooth and CAN Bus communication. Preorders for the Edge battery are now open, with shipping expected to commence in the third quarter of 2024. These are recent developments from Expion360 Inc.
InvestingPro Insights
Expion360's decision to implement a 1-for-100 reverse stock split comes at a critical time for the company, as revealed by recent InvestingPro data. The company's market capitalization stands at a modest $2.62 million, reflecting the significant challenges it faces. This move is likely a response to the stark reality presented by several key metrics and trends.
InvestingPro Tips highlight that Expion360 is "quickly burning through cash" and "may have trouble making interest payments on debt." These factors underscore the urgency of the company's efforts to maintain its Nasdaq listing, as access to capital markets could be crucial for its ongoing operations and growth plans.
The company's financial performance has been concerning, with revenue declining by 17.2% over the last twelve months as of Q2 2024. This aligns with another InvestingPro Tip indicating that "analysts anticipate sales decline in the current year." Moreover, with an operating income margin of -152.85%, Expion360 is currently not profitable, which explains the negative P/E ratio of -0.32.
The stock's performance has been particularly troubling, with InvestingPro data showing a 99.01% price decline over the past year. This dramatic drop is consistent with the InvestingPro Tip that the "stock has taken a big hit over the last week" and has "fared poorly over the last month."
These insights from InvestingPro provide crucial context for Expion360's reverse stock split decision, highlighting the company's urgent need to address its financial and market position. Investors considering this stock may find value in exploring the additional 11 tips available on InvestingPro, which could offer a more comprehensive view of Expion360's prospects and challenges.
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