Nanotechnology firm PEN Inc. has initiated a highly unusual 1-for-180 reverse stock split.
That's right. As of Jan. 26, shareholders will get one share of PEN stock for every 180 shares they held.
“We believe effecting a reverse split of our common stock serves the long-term interest of our shareholders, allowing us to attract interest from a broader range of investors and potential business partners,” Chairman and CEO Scott Rickert said in a news release.
The reverse split comes a month after officials with Deerfield Beach, Fla.-based PEN asked stock regulators to investigate short positions taken by market makers in PEN stock. Rickert said in a Dec. 2 news release that “for months now, it has appeared that any uptick in our stock price is met with an increase in the short position in our stock.”
“This, I believe, artificially lowers our stock price [and] that allows those with short positions to benefit at the expense of our long-term investors,” he added.
PEN had been a penny stock traded over the counter. The price stood near 6 cents per share in early May, but declined since then and closed at just under 1.4 cents per share on Jan. 25. After the reverse split, the stock was at $3.05 in early trading Jan. 27.
PEN was formed in 2014 from the merger of nanotech firms NanoHolding Inc. of Valley View, Ohio, and Applied Nanotech Holdings Inc. of Austin, Texas. NanoHolding was the parent company of Nanofilm Ltd., a firm that Rickert co-founded in 1985 while a professor at Case Western Reserve University in Cleveland.
Nanofilm makes film products for the optical, automotive, marine, electronics and household markets. Most of Nanofilm's products are based on polyolefins, but epoxy, acrylic and polyurethane resins are used as well. Applied Nanotech had used its CNT-brand composites to strengthen nylon and epoxy resins. The firm also makes nano-based films, pastes and inks.
PEN — like its predecessor firms — has struggled to commercialize its nanotech products. In the first nine months of 2015, PEN posted a loss of just over $1.5 million, after earning almost $100,000 in the same period in 2014. The firm's sales fell almost 3 percent to just under $7.4 million in the same comparison.
But Rickert has remained optimistic, saying in a recent news release that PEN scientists “have made exciting breakthroughs” in the areas of 3-D-printed electronics and medical imaging.