On September 14, 2020, Eagle Bulk Shipping Inc., a Republic of the Marshall Islands corporation (the “Company”), filed Articles of Amendment (the “Amendment”) to its Third Amended and Restated Articles of Incorporation with the Registrar of Corporations of the Republic of the Marshall Islands to implement a 1-for-7 reverse stock split of the Company’s issued and outstanding shares of common stock, par value US$0.01 per share (the “Common Stock”), which will become effective at 9:00 a.m., Eastern Time, on September 15, 2020 (the “Reverse Stock Split”). On June 19, 2020, the Company received shareholder approval to effect the Reverse Stock Split at a ratio between 1-for-5 and 1-for-20 (inclusive), with such ratio to be determined by the Company’s Board of Directors (the “Board”), which the Board determined to be 1-for-7.
The Company’s Common Stock is expected to begin trading on a split-adjusted basis on Nasdaq Global Select Market (“Nasdaq”) on September 15, 2020. The Company’s Common Stock will continue to trade under the symbol “EGLE” but will have a new CUSIP number (Y2187A 150).
When the Reverse Stock Split becomes effective, every seven shares of the Company’s issued and outstanding Common Stock will be automatically combined into one issued and outstanding share of Common Stock without any change in the par value per share or the total number of authorized shares. This will reduce the number of outstanding shares of the Company’s Common Stock from approximately 77.1 million shares to approximately 11.0 million shares.
No fractional shares of Common Stock will be issued in connection with the Reverse Stock Split. If as a result of the Reverse Stock Split, a shareholder of record would otherwise hold a fractional share, the fractional share resulting from the Reverse Stock Split will be rounded down to the nearest whole share. Furthermore, if a shareholder holds less than seven shares prior to the Reverse Stock Split, then such shareholder will receive in lieu of fractional shares a cash payment (without interest and subject to applicable withholding taxes) in an amount per share equal to the closing price per share on Nasdaq on the trading day immediately preceding the effective date of the Reverse Stock Split.
Proportionate adjustments will be made to the per share exercise price and the number of shares issuable upon the exercise of all of the Company’s outstanding warrants, the exercise price and number of shares issuable upon the exercise of the options outstanding under the Company’s equity incentive plans, and the number of shares subject to restricted stock awards under the Company’s equity incentive plans. Furthermore, the indenture that governs our Convertible Bond Debt provides that the conversion rate will be adjusted in connection with any stock split transaction.
Shareholders holding share certificates will receive information from Computershare, Inc., the Company’s transfer agent, regarding the process for exchanging their shares of Common Stock. Shareholders who hold their shares in brokerage accounts or in “street name” will not be required to take any action to effect the exchange of their shares.