UNITED STATES - Kaival Brands Innovations Group (NASDAQ:KAVL), known for its electronic nicotine delivery systems, has announced a significant change in its stock structure. Effective Thursday, January 25, 2024, the company will undergo a 1-for-21 reverse stock split. This strategic move is designed to bring the company into compliance with the Nasdaq's minimum bid price rule, which requires shares to maintain a minimum average closing price of $1.00.
The reverse stock split will dramatically reduce the number of Kaival Brands' outstanding shares from approximately 58 million to around 2.8 million. The company's decision aims to enhance the stock's attractiveness to institutional investors by boosting the per-share price, thereby meeting the Nasdaq's listing criteria.
In the process of the reverse split, the company will not issue any fractional shares. Instead, any fractional shares resulting from the split will be rounded up to the nearest whole number. It's important to note that the reverse split will not alter the authorized share count of the company.
Kaival Brands has undertaken this restructuring as part of a broader strategic initiative to align with Nasdaq standards and to increase investment interest in the company. The reverse stock split is a common tactic used by public companies to lift share prices and is often seen as a way to rejuvenate investor perception and marketability of the stock.
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