Wave Systems Corp. (NASDAQ: WAVX) announced today that, following shareholder approval at the special Shareholders’ meeting on December 28, 2015, the Board of Directors has approved a 1-for-10 reverse split of the Company’s common stock. The reverse stock split will be in effect at the commencement of trading Thursday, December 31, 2015.
The reverse split is being implemented for purposes of regaining compliance with the $1.00 per share minimum closing bid price requirement for continued listing on the Nasdaq Capital Market.
For every ten (10) shares held, Wave shareholders will receive in exchange one (1) new share of Wave Systems common stock. Shareholders otherwise entitled to fractional shares as a result of the reverse stock split will receive cash payments in lieu of those fractional shares. The number of common shares issued and outstanding (Class A and Class B combined) will be reduced to approximately 6.1 million (from approximately 60.8 million). Shareholders’ percentage ownership in the Company will remain unchanged as a result of the reverse split.
The Board of Directors believes that the reverse stock split will enable the Company to regain compliance with the $1 per share minimum closing bid price continued listing requirement. However, there can be no assurance that this result will be achieved or that Wave will maintain the listing of its common stock on the Nasdaq Capital Market.
In addition to the bid price rule, in order to remain listed on the NASDAQ Capital Market, we must also maintain compliance with all of the other required continued listing requirements of the NASDAQ Capital Market, including the $35 million market capitalization requirement. We are not currently in compliance with this rule. In accordance with the NASDAQ Listing Rules, the Company has been provided a grace period of 180 calendar days, through February 8, 2016, to evidence compliance with the minimum market value rule.