Psychemedics Corporation (NASDAQ: PMD) stock has seen a notable price increase on the US stock charts, following a strategic announcement. As of the latest market update, PMD shares were trading 25.68% higher at $2.30.
Psychemedics Approved A Strategic Plan
Psychemedics (PMD) Board of Directors authorized a major modification to the organization’s operating framework through its Transaction Committee, which is made up of independent directors. The judgment entails delisting the company’s shares from the Nasdaq Capital Market and terminating the registration of its common stock under federal securities rules. This proposal is scheduled to be implemented in the fall of 2024, assuming stockholder approval at the approaching 2024 Annual Meeting.
This strategic change is being made in order to reduce the significant expenses that come with being a public reporting business. Psychemedics wants to focus its efforts on increasing long-term shareholder value, which is why it is making this shift. The corporation estimates that this deregistration and delisting exercise would result in yearly savings of almost $900,000.
Reverse PMD Stock Split and Fractional Share Buyout
A proposed reverse stock split, with an anticipated ratio of between 1-for-4,000 and 1-for-6,000, is a crucial part of this proposal. A cash payment of $2.35 per fractional share will be made to shareholders holding quantities below the reverse split ratio; this payment will reflect a premium over the closing price of the stock on August 9, 2024.
The Transaction Committee retained Mirus Capital Advisors Inc. to provide a fairness analysis, which supports this value. For shareholders owning amounts above the reverse split ratio, their stockholdings will remain intact. A subsequent forward split will be applied to maintain their number of shares post-reverse split, thus avoiding any dilution of their holdings.
Psychemedics intends to use cash reserves and profits from the issuing and sale of additional shares to enable the acquisition of fractional shares arising from the reverse split. This calculated action demonstrates the company’s dedication to improving shareholder value and optimizing operations.