Evaxion Biotech A S Adr (EVAX)

Evaxion Biotech A/S ADR (EVAX) stock dropped by 45.36% due to a crucial announcement regarding a change in the ratio of its American Depositary Shares (ADSs) to its ordinary shares, DKK 1 nominal value, which had an immediate and pronounced effect on its stock price.

• The ADS Ratio Change Explained: Evaxion Biotech implemented an ADS Ratio Change, transitioning from the previous ratio of one (1) ADS representing one (1) ordinary share to a new ratio of one (1) ADS representing ten (10) ordinary shares. This significant change took effect on January 22, 2024, and had an impact similar to a one-for-ten reverse ADS split. The primary objectives behind this change were to enhance the liquidity of the Company's ADSs and to facilitate compliance with Nasdaq's minimum bid price requirement.
• Impact on ADS Holders: For ADS holders, the ADS Ratio Change meant that existing ADSs were automatically exchanged for new ADSs on the Effective Date. The Bank of New York Mellon, the depositary bank, managed this process. Registered holders of certificated ADSs were required to surrender their existing ADSs for cancellation and received one (1) new ADS for every ten (10) existing ADSs. Uncertificated ADS holders in the Direct Registration System (DRS) and The Depository Trust Company (DTC) also had their ADSs exchanged on a ten-to-one basis. Importantly, this change did not alter any shareholder's percentage interest in the Company's equity, except in cases where fractional ADSs were involved.
• Market Response and Expectations: In response to the ADS Ratio Change, Evaxion Biotech A/S ADR's stock price witnessed a substantial decline. While the change was implemented to improve liquidity and compliance with Nasdaq regulations, the impact on the ADS trading price remains uncertain. The Company could not guarantee that the ADS trading price after the Ratio Change would be proportionally equal to or greater than its previous level, nor could it predict the specific effect on the liquidity of its ADSs.

The Company's decision to implement the ADS Ratio Change reflects its strategic approach to adapt to evolving market dynamics and regulatory requirements. Shareholders and investors will closely monitor the market's response and the long-term implications of this change on Evaxion Biotech A/S.