Enveric Biosciences Inc. (NASDAQ:ENVB), a pharmaceutical preparations company with a market capitalization of $3.43 million, announced a 1-for-15 reverse stock split of its common stock that will take effect at the start of trading on January 27, 2025. The company's stock has faced significant pressure, declining over 67% in the past year. According to InvestingPro analysis, the company currently trades below its Fair Value. This decision follows the approval by stockholders at a special meeting held on January 17, 2025, where they granted the board the authority to choose a reverse stock split ratio within the range of 1-for-10 to 1-for-100.
The reverse stock split will consolidate every 15 shares of issued and outstanding common stock into one share, with the par value remaining unchanged. The action aims to decrease the number of outstanding shares from approximately 10.39 million to roughly 692,580, rounding up any fractional shares to the nearest whole number. InvestingPro data reveals the company maintains a strong current ratio of 5.17, indicating sufficient liquid assets to meet short-term obligations. However, the total number of authorized shares of common stock will not be altered, remaining at 100 million shares.
The reverse split will also proportionately adjust the exercise prices and the number of shares purchasable upon exercising outstanding stock options. Additionally, it will affect the number of shares reserved for future issuance under the company's 2020 Long-Term Incentive Plan.
Enveric Biosciences' common stock will continue trading under the ticker "ENVB" on the Nasdaq Capital Market, with a new CUSIP number of 29405E 406 post-split. The company's business address, phone number, and state of incorporation remain unchanged.
The reverse stock split is part of Enveric Biosciences' strategic efforts to comply with Nasdaq's listing requirements and improve the marketability and liquidity of its common stock. This move comes as the company faces financial challenges, with InvestingPro analysis highlighting rapid cash burn and negative free cash flow. Subscribers to InvestingPro can access 8 additional key insights about ENVB's financial health and future prospects.
In other recent news, Enveric Biosciences has been making strides with its intellectual property portfolio and strategic partnerships. The biotechnology firm has secured four new U.S. patents for its EVM301 series molecules and its EVM201 series prodrug molecules, bolstering its efforts in the treatment of anxiety, depression, and addiction. These patents are aimed at inducing neuroplasticity without hallucinogenic effects, a crucial factor for regulatory approval.
The company has also faced a potential delisting from Nasdaq due to failure to meet the minimum bid price requirement but plans to appeal the decision. Enveric Biosciences has further entered into a licensing agreement with MycoMedica Life Sciences for the development of drug candidate EB-002, which could potentially result in up to $62 million in payments and royalties for Enveric, provided certain conditions are met.
Additionally, Enveric has secured five new US patents for its proprietary library of tryptamine derivative molecules, potentially broadening the therapeutic applications of its drug candidates. The company is also developing a CBD-based lotion in partnership with Aries Science & Technology to treat radiation dermatitis, which could potentially benefit two million cancer patients annually.
Enveric Biosciences has also entered into strategic partnerships, including licensing its Novel Psilocin Prodrugs to MindBio Therapeutics and out-licensing its patented cancer treatment methods to an undisclosed licensee. These are all recent developments in the company's operations.
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