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Cara Therapeutics, a Stamford-based biopharmaceutical company, said Friday it plans to conduct a 1-for-12 reverse stock split in an effort to regain compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market.
The company, which earlier this month announced plans to merge with Houston-based biopharmaceutical firm Tvardi Therapeutics Inc., said it will conduct a 1-for-12 reverse stock split for its outstanding shares of common stock and reduce the total number of authorized shares from 200 million to 16.67 million as of 5 p.m. Monday, Dec. 30.
The common stock will begin trading on a reverse stock split-adjusted basis when the market opens on Tuesday. After the reverse stock split, Cara's common stock will continue to trade on the Nasdaq Capital Market under the symbol "CARA."
The goal is to boost the stock’s minimum bid price above $1 per share, as required by Nasdaq listing rules. As of Monday morning, the stock was trading at 33 cents per share after opening at 37 cents per share.
At the effective time of the reverse split, every 12 issued and outstanding shares of Cara’s common stock will automatically be combined into one issued and outstanding share of the company's common stock, without any change in the par value per share. The authorized shares of the company’s common stock will also be reduced.
Fractional shares will not be issued in connection with the reverse stock split, the company said. Stockholders who would otherwise be entitled to receive a fractional share will instead be entitled to receive a cash payment.
The reverse stock split will affect all stockholders uniformly and will not alter any stockholder's relative interest in the company's equity securities, except for any adjustments for fractional shares, the company said.
In addition, proportionate adjustments will be made to the number of shares underlying, and the exercise or conversion prices of, the company's outstanding stock options, and to the number of shares of common stock issuable under the company's equity incentive plans, it said.
The reverse stock split will reduce the number of issued and outstanding shares of the company's common stock from approximately 54.9 million to approximately 4.6 million, it said.
In announcing the merger, Cara said the deal is expected to close on March 31, 2025. Once completed, the combined company is expected to operate under the name Tvardi Therapeutics Inc. and trade on the Nasdaq Stock Market under the ticker symbol “TVRD.”
The merger and stock split come at the end of a difficult financial year for the biopharmaceutical firm, which has cut its staff by more than 90%.
Founded in 2004 in Tarrytown, New York, Cara relocated to Connecticut in 2007 with $4 million in financial assistance from Connecticut Innovations, the state’s venture capital arm. The company relocated to Shelton before moving to Stamford in 2015.
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