Calyxt to Proceed with Reverse Stock Split
Calyxt Inc.’s stock has been trading at under $1 a share for a little over a year, but execs are officially moving forward with a plan aimed at boosting the company’s share price.
On Friday, the Roseville-based biotech firm announced that it will initiate a “reverse stock split” on April 24. The company is specifically planning for a “1-for-10” split, in which every ten shares of its common stock will be converted to a single stock. “This will reduce the number of outstanding shares of Calyxt common stock from approximately 49.3 million to approximately 4.9 million,” Calyxt officials said in a press release issued late last week.
The company’s shareholders already approved the move at their annual meeting back in June.
The company has good reason to try to boost its stock value: In 2022, Nasdaq informed Calyxt that it was at risk of being delisted for failing to meet the minimum mandatory share price of $1.
Calyxt has floated a few other ideas to raise its value recently, including a planned merger with California-based agricultural technology company Cibus. That deal is slated to close in the second quarter of this year.
While relatively rare, reverse stock splits do happen. Nearly two years ago, industrial giant GE completed its own 1-for-8 reverse stock split. At the time, GE leaders said the move was designed to decrease the number of common stock shares to “levels that are better aligned with companies of GE’s size and scope.”
The split, they said, marked a “clearer reflection of the GE of the future, not the past.”
As of Monday, Calyxt’s stock was trading at 30 cents a share.
Calyxt’s financial troubles appeared to begin back in 2021, after the company announced a significant change to its business model. The company originally used gene-editing technology to create its own line of products, including a soybean-based cooking oil. In October 2021, however, Calyxt shifted its focus to licensing its technology to other companies. It also began to wind down its own line of soybean products. The technology originated from University of Minnesota research.
The business model shift was aimed at opening up Calyxt for opportunities in other industries, but it had a big impact on the company’s revenue. In its 2021 fiscal year, Calyxt reported total revenue of $1.943 million. Fast forward to the 2022 fiscal year, and the number dropped to just $42,000.
