Freeline Therapeutics Holdings plc (NASDAQ:FRLN) today announced that the company’s previously disclosed change to its American Depositary Share (“ADS”) to ordinary share ratio has been made effective prior to the open of business on May 12, 2023. The ratio has changed from one (1) ADS to one (1) ordinary share to the new ratio of one (1) ADS to fifteen (15) ordinary shares.
For the company’s ADS holders, the change in the ADS ratio has the same effect as a one-for-fifteen reverse ADS split and is intended to enable the company to regain compliance with the Nasdaq minimum bid price requirement. At the effective time of the ratio change, all ADSs then held were canceled and new ADSs were issued, whereby for every fifteen ADSs canceled, one new ADS was issued. Holders of uncertificated ADSs had their ADSs automatically exchanged.
The ADS ratio change has no impact on Freeline’s underlying ordinary shares, and no ordinary shares will be issued or canceled in connection with the ADS ratio change. The ratio change affects all ADS holders uniformly and will not alter any ADS holder’s percentage interest in the company’s equity, except to the extent that the ratio change would have resulted in an ADS holder owning fractional ADS. No fractional ADSs were issued in the ratio change. Instead, fractional entitlements to new ADSs will be aggregated and sold by the depositary bank and the net cash proceeds from the sale (after deduction of fees, taxes and expenses) will be distributed to the applicable ADS holders by the depositary bank. Freeline’s ADSs continue to be traded on the Nasdaq Capital Market under the ticker symbol “FRLN.”
The company will pay the depositary fees in connection with the ADS ratio change and expects to disclose the related charges in its report on Form 6-K for the six months ended June 30, 2023.
