Upland Software Inc announced a 1-for-10 reverse split that will become effective on June 17, a corporate action the company says is aimed at restoring compliance with Nasdaq's minimum bid price listing requirement. The company's shares fell 5.5% in pre-market trading on the news.
The reverse split will reduce the count of outstanding common shares from approximately 29.4 million to approximately 2.9 million. Shareholders approved the measure at Upland's annual meeting on June 3, at which they granted the board authority to implement a reverse split at any ratio between 1-for-5 and 1-for-30. The board selected the 1-for-10 option.
Trading in the post-split shares is scheduled to commence at 12:01 AM Eastern Time on June 17, prior to the market open. The company will retain its current Nasdaq Global Market ticker symbol "UPLD" following the reverse split, but its securities will be affiliated with a new CUSIP number - 91544A208.
Upland said the reverse split will not alter the par value of its common stock, which will remain $0.0001 per share, and it will not change the authorized number of shares of common or preferred stock.
In practical terms for holders of derivative and equity-based awards, all outstanding options, restricted stock awards and other securities that confer rights to acquire shares will be adjusted to reflect the reverse split. The number of shares available for issuance under Upland's 2024 Omnibus Incentive Plan will also be modified to reflect the new share count.
The company noted there will be no issuance of fractional shares as part of the split. Stockholders who otherwise would have received fractional shares will instead receive a cash payment. That payment will be based on the average closing price during the five trading days that preceded Upland's filing of the amendment with Delaware's Secretary of State.
Context and mechanics
The reverse split is a procedural change that consolidates outstanding shares without changing the total authorized shares or the par value, while demanding mechanical adjustments to options, awards and plan share counts. The stated objective is compliance with Nasdaq's minimum bid price standard; the company tied the timing and ratio selection to authority granted by shareholders at the annual meeting.
Market reaction
Investors reacted in pre-market trading with a 5.5% decline in the share price following the announcement of the reverse split and the schedule for its implementation.