On April 22, ToughBuilt Industries Inc. (TBLT) announced a 1-for-150 reverse split in a plan for regaining compliance with Nasdaq. Consequently, the stock took a harsh hit in the after-hours and declined by 23.27%. TBLT reported a new 52-week low of $0.1352 in the session against its previous low of $0.1379. This decline came after a loss of 2.33% in regular trading which valued the stock at $0.1762 a share at the close.
The company has been in non-compliance with Nasdaq’s minimum bid price requirement since May 2021. After exhausting its initial 180-day grace period for regaining compliance, the company applied for and received additional 180 days. As per the extension, the company has until May 16, 2022, to meet the minimum bid requirement of Nasdaq. In order to regain compliance, TBLT common stock needs to close at or above $1.00 a share for a minimum of 10 consecutive trading days before the end of the given extension.
In case of failure to regain compliance within the given extension, the company’s shares will be subject to delisting.
TBLT’s Reverse Split
On Friday, the company announced to effect a 1-for-150 reverse split of its common stock in order to regain compliance with Nasdaq. Expected to be effective at 12:01 a.m. ET on April 25, 2022, TBLT common stock will start trading on a post-split basis on Monday at the opening of the market. Moreover, the split is pending approval by the Depository Trust Company and Nasdaq.
Furthermore, the reverse split, approved by the company’s stockholders in a special meeting on April 1, is expected to help increase the per-share price of its common stock. Additionally, the reverse split will reduce the outstanding number of shares from 154,300,090 to roughly 1,028,625.
The company does not plan on issuing fractional shares and would compensate stockholders entitled to fractional shares in a cash payment.
TBLT’s Overview & Outlook
The home improvement and construction products company has been thriving despite the global supply chain disruptions and inflationary pressure amid economic instability. Recently, the company posted a huge improvement of 105% YOY in its quarterly earnings for Q4 2021. Not only this but the 2021 full revenue also marked a stark increase of over 77% due to new products launches and customer additions. The company has 5 to 10 new product line launches planned for 2022 as it continued global distribution expansion.
Following a reverse stock split announcement, TBLT stock suffered a blow in the after-hours. The company is effecting a 1-for-150 reverse split in a plan for regaining compliance with Nasdaq before its extended grace period ends in May 2022.