Sonoma Pharmaceuticals announces 1-for-20 reverse stock split

BOULDER, CO - Sonoma Pharmaceuticals, Inc. (NASDAQ:SNOA), a healthcare company specializing in stabilized hypochlorous acid products, is set to undergo a 1-for-20 reverse stock split of its common stock. This action will take effect on Thursday, August 29, 2024, at 5:00 pm EDT, with trading to commence on the adjusted basis at market open on Friday, August 30, 2024.

The reverse split aims to elevate the company's per-share trading price to comply with the Nasdaq Capital Market's minimum bid price requirement. To retain its listing, Sonoma's common stock must uphold a closing bid price of at least $1.00 for a minimum of 10 consecutive trading days before September 16, 2024. However, there is no guarantee that the reverse split will achieve this objective.

As a result of the split, every twenty shares of issued and outstanding Sonoma common stock will be converted into one share, with the par value remaining unchanged. Fractional shares will not be issued; shareholders will receive a cash payment instead, based on the August 29 closing price.

Following the reverse split, the number of Sonoma's outstanding common shares will reduce from around 20 million to about 1 million. Corresponding adjustments will be made to the company's stock options and equity-compensation plans. The authorized shares of common stock will also be increased from 24 million to 50 million, as approved by stockholders and the Board of Directors.

Stockholders with shares in brokerage accounts or held in book-entry form will see their holdings automatically adjusted to account for the reverse split. Those holding physical stock certificates will receive instructions from the transfer agent, Computershare, Inc., on how to exchange their shares.

This event is based on a press release statement and aims to provide shareholders with the necessary information regarding the upcoming changes to the company's stock structure. Sonoma continues to market its diverse range of healthcare products globally and seeks new distribution partnerships.

In other recent news, Sonoma Pharmaceuticals has announced several key developments. The pharmaceutical company has amended its Equity Distribution Agreement with Maxim Group LLC, facilitating the continued sale of its common stock. In addition, Sonoma has signed a distribution agreement with a major global healthcare distributor to market and distribute its wound care products across the United States, aiming to extend the reach of its Microcyn technology.

Sonoma Pharmaceuticals also entered into a significant distribution agreement with Medline Industries. The initial term of this contract spans five years and is expected to enhance the reach of Sonoma's wound care solutions by leveraging Medline's extensive distribution network.

In terms of product expansion, Sonoma introduced its MicrocynAH® animal health line to Menards® home improvement stores nationwide. Moreover, the company expanded its Microcyn® Negative-Pressure Wound Therapy (NPWT) Solution in the U.S. market.

A recent study highlighted the potential of Sonoma's product, Microdox®, in treating urinary tract infections in children with bladder dysfunction. These developments are part of Sonoma Pharmaceuticals' commitment to innovation, product range expansion, and exploration of new therapeutic applications.

InvestingPro Insights

Amidst the forthcoming reverse stock split for Sonoma Pharmaceuticals, Inc. (NASDAQ:SNOA), investors are closely monitoring the company's financial health and market performance. An InvestingPro analysis reveals a couple of noteworthy aspects that could influence shareholder perspective in light of the recent announcement.

Firstly, Sonoma Pharmaceuticals is carrying more cash than debt on its balance sheet, which is a positive sign of the company's ability to manage its financial obligations in the short term. This aligns with the InvestingPro Tip that the company's liquid assets exceed its short-term obligations, providing some financial stability as it navigates the reverse stock split process.

However, it's important to consider that the company is not profitable over the last twelve months, and analysts do not anticipate Sonoma will be profitable this year. This highlights underlying challenges in achieving financial growth and may affect investor confidence, particularly in conjunction with the reverse split aimed at maintaining NASDAQ listing compliance.

From a market performance standpoint, the stock has experienced significant price fluctuations, with a large price uptick over the last six months, yet a substantial decline over the last year. The InvestingPro Data indicates a 6-month price total return of 51.47%, contrasted by a 1-year price total return of -75.9%.

As for valuation, Sonoma Pharmaceuticals is trading at a low revenue valuation multiple, with a Price/Book ratio in the last twelve months as of Q1 2025 standing at 0.89. This could suggest that the company's stock is undervalued relative to its book value, potentially attracting value investors.

For investors seeking a more in-depth analysis, there are additional InvestingPro Tips available that can offer further guidance on Sonoma Pharmaceuticals' performance and outlook. Visit the InvestingPro platform for a comprehensive list of tips and real-time metrics to inform your investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.