Upland Software Inc. (NASDAQ:UPLD) moved lower in premarket trading on Thursday after confirming plans to implement a 1-for-10 reverse stock split, a step aimed at restoring compliance with Nasdaq’s minimum share price requirement.
Shares of the enterprise software provider fell 5.5% following the announcement.
Reverse Split Set for Mid-June
The reverse stock split will become effective on June 17, with post-split trading scheduled to begin at 12:01 a.m. Eastern Time before the market opens.
Following the adjustment, Upland’s shares will continue trading on the Nasdaq Global Market under the ticker symbol “UPLD”, although they will be assigned a new CUSIP number, 91544A208.
The company said the action is intended primarily to bring its share price back into compliance with Nasdaq listing standards.
Outstanding Share Count to Be Reduced
Upon completion of the transaction, the number of shares outstanding will decrease from approximately 29.4 million to roughly 2.9 million.
While the reverse split will reduce the share count, it will not alter shareholders’ proportional ownership interests in the company, except for adjustments related to fractional shares.
The par value of Upland’s common stock will remain unchanged at $0.0001 per share.
Shareholders Approved the Measure
The proposal received shareholder approval during the company’s annual meeting held on June 3.
At that meeting, investors authorized Upland’s board of directors to execute a reverse stock split within a range of 1-for-5 to 1-for-30.
Following that authorization, the board elected to proceed with a 1-for-10 ratio.
Equity Awards and Other Securities to Be Adjusted
The reverse split will result in corresponding adjustments to outstanding stock options, restricted stock awards and other securities that provide rights to acquire common shares.
The number of shares available under the company’s 2024 Omnibus Incentive Plan will also be modified to reflect the new capital structure.
These changes are designed to maintain the economic value of existing awards following the split.
Treatment of Fractional Shares
Upland confirmed that no fractional shares will be issued as part of the transaction.
Investors who would otherwise be entitled to receive a fractional share will instead receive a cash payment.
The payment will be calculated using the average closing price of the company’s stock during the five trading sessions immediately preceding the filing of the amendment with the Delaware Secretary of State.
Capital Structure Otherwise Unchanged
Aside from the reduction in outstanding shares, the reverse split will not affect the company’s authorized number of common or preferred shares.
Management believes the move will strengthen Upland’s position with respect to Nasdaq listing requirements while preserving flexibility for future corporate and strategic initiatives.