Markforged approves 1-for-10 reverse stock split

We’ve seen it happen a few times this year (nearly as much as we saw companies go public via SPAC mergers a few years ago) and now Markforged Holding Corporation (NYSE: MKFG) has become the latest company whose Board of Directors approved a 1-for-10 reverse stock split of its Common Stock to be effective 12:01 a.m., Eastern Time, on September 19, 2024. This will result in an associated proportional reduction in the number of shares of Common Stock the Company is authorized to issue. The Company expects its Common Stock to begin trading on a split-adjusted basis on the New York Stock Exchange as of the commencement of trading on September 19, 2024.

Markforged went public through an SPAC merger with one in 2021. On June 18, 2024, the Company’s stockholders approved a reverse stock split of the Company’s Common Stock at a ratio ranging from 1-for-5 to 1-for-10, inclusive, with such ratio to be determined at the discretion of the Company’s Board of Directors and with such reverse stock split to be effected at such time and on such date as determined by the Board of Directors in its sole discretion (but in no event later than December 31, 2024). The reverse stock split is intended to bring the Company into compliance with the minimum bid price requirement for continued listing on the New York Stock Exchange.

The 1-for-10 reverse stock split will automatically result in the conversion of ten (10) current shares of the Company’s Common Stock into one (1) new share of Common Stock. The Company’s Common Stock will continue to trade on the New York Stock Exchange under the symbol “MKFG” following the reverse stock split, with a new CUSIP number of 57064N201. In some cases the reverse stock split has served to keep the company “afloat” on the NYSE or NASDAQ stock market index for a while. Some, like Desktop Metal managed to complete a merger/acquisition while others, like voxeljet and, as of today, Velo3D, ended up de-listing. Even a giant like 3D Systems is getting dangerously close to receiving a de-listing notice as its stock is now trading below $2.

After the effectiveness of the reverse stock split, the number of outstanding shares of Common Stock will be proportionally reduced from approximately 203 million to approximately 20.3 million, subject to adjustment to give effect to the treatment of any fractional shares that stockholders would have received as a result of the reverse stock split. No fractional shares will be issued in connection with the reverse stock split, and stockholders who would otherwise be entitled to a fractional share will receive an additional fraction of a share such that they will own a whole number of shares of Common Stock post-split.

Proportional adjustments will also be made to the number of shares of Common Stock awarded and available for issuance under the Company’s equity incentive plans, as well as the exercise price and the number of shares issuable upon the exercise or conversion of the Company’s outstanding stock options, restricted stock units and other equity securities under the Company’s equity incentive plans. Additionally, all outstanding warrants will be adjusted in accordance with their terms, which will, among other changes to the warrant terms, result in proportionate adjustments being made to the number of shares issuable upon exercise of such warrants and to the exercise and redemption prices of such warrants.

Specifically, following the effectiveness of the reverse stock split, every ten (10) shares of Common Stock that may be purchased pursuant to the exercise of public warrants will represent one (1) share of Common Stock that may be purchased pursuant to such warrants. Accordingly, for the Company’s warrants trading under the symbol “MKFG WS”, every ten (10) warrants will be exercisable for one (1) share of Common Stock at an exercise price of $115.00 per share of Common Stock. In conjunction with the reverse stock split, the number of shares of Common Stock authorized for issuance will be reduced from 1 billion to 100 million.

Continental Stock Transfer & Trust Company (“Continental”), the Company’s transfer agent, is acting as the exchange agent for the reverse stock split. Stockholders of record owning their shares in book-entry will be receiving a transaction statement from Continental regarding their Common Stock ownership post-reverse stock split and are not required to take any action to receive post-split shares.

Stockholders owning shares through a bank, broker, custodian or other nominee will have their positions automatically adjusted to reflect the reverse stock split, subject to the holding entity’s particular processes; such stockholders will not be required to take any action to receive post-split shares. However, these banks, brokers, custodians or other nominees may have different procedures than Continental for processing the reverse stock split.