June 19, 2023
Avoiding Delisting: Energy Focus Executes Reverse Split
Company initiates 1-for-7 reverse split effective tomorrow
As we’ve reported in multiple articles dating back to August 2022, Energy Focus, a Nasdaq Capital Market-listed company, faces Nasdaq delisting due to its failure to meet the minimum bid price and stockholders' equity requirements.
Energy Focus received notifications about these shortcomings in August and November 2022, respectively. Although the company was given until May 15, 2023, to regain compliance, it became ineligible for a second 180-day extension due to unmet stockholders' equity requirements. As its stock has not closed above $1.00 since July 2022, and trading at $0.47 in early May, Energy Focus proposed a reverse stock split, with ratios from 1-for-2 to 1-for-10, as a means to maintain compliance.
The proposal was voted on and approved during a recent shareholders' meeting. Consequently, Energy Focus has announced a 1-for-7 reverse stock split. The move comes as part of an effort to meet Nasdaq's $1 minimum bid price for continued listing.
The reverse split, approved by shareholders and the board, will reduce the number of outstanding shares from 19.2 million to around 2.7 million. The new stock is expected to start trading on a split-adjusted basis on Nasdaq on June 20, 2023. Further details will be provided in the company's Form 8-K to be filed with the SEC on or around June 22, 2023.
