PMD Psychemedics Corporation

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 3, 2024

_________________

 

PSYCHEMEDICS CORPORATION

(Exact name of Registrant as Specified in its Charter)

 

Delaware		1-13738		58-1701987
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

5220 Spring Valley Road, Suite 230 Dallas, Texas		75254
(Address of Principal Executive Offices)		(Zip Code)

 

(800) 527-7424

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, $0.005 par value per share		PMD		The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Item 3.01

Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

 

In connection with the events described in Item 8.01 below, on December 3, 2024, Psychemedics Corporation (the “Company”) provided advance notice to the Nasdaq Stock Market LLC of its intent to voluntarily withdraw the Company’s common stock, par value $0.005 per share (the “Common Stock”), from listing on the Nasdaq Capital Market and to deregister the Common Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended.

 

The Company intends to file a Form 25 Notification of Removal from Listing and/or Registration and a Form 15 with the Securities and Exchange Commission (the “Commission”) and cease reporting as a public company.

 

Item 8.01

Other Events.

 

Following the Company’s annual meeting of stockholders on November 25, 2024, where, among other matters, the holders of a majority of the Company’s issued and outstanding shares of Common Stock entitled to vote approved amendments to the Company’s Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) to effect a 1-for-5,000 reverse stock split of the Common Stock (the “Reverse Stock Split”), followed immediately by a 5,000-for-1 forward stock split of the Common Stock (the “Forward Stock Split,” and together with the Reverse Stock Split, the “Stock Split”), the Company filed certificates of amendment to the Certificate of Incorporation with the State of Delaware to effect the Reverse Stock Split, followed immediately by the Forward Stock Split, both effective on December 3, 2024 at 5:01 and 5:02 p.m. Eastern Time, respectively. As a result of the Stock Split, each stockholder owning fewer than 5,000 shares of Common Stock immediately prior to the effective time of the Reverse Stock Split will receive $2.35 per share, without interest, in cash for each share of Common Stock held by such stockholder at the effective time of the Reverse Stock Split, and such stockholder will no longer be a stockholder of the Company.

 

Stockholders who own 5,000 or more shares of Common Stock immediately prior to the effective time of the Reverse Stock Split will not be entitled to receive any cash for their fractional share interests resulting from the Reverse Stock Split, if any. The Forward Stock Split that will immediately follow the Reverse Stock Split will reconvert whole shares and fractional share interests held by such stockholders back into the same number of shares of Common Stock held by such stockholders immediately before the effective time of the Reverse Stock Split. As a result, the total number of shares of Common Stock held by such stockholders will not change.

 

The foregoing description of the certificates of amendment to the Certificate of Incorporation is not complete and is subject to and qualified in its entirety by reference to each such certificate of amendment, copies of which are attached hereto as Exhibit 3.1 and Exhibit 3.2, respectively, and are incorporated herein by reference.

 

The press release announcing the Stock Split is filed as Exhibit 99.1 and is incorporated herein by reference.

 

For a more detailed discussion of the Stock Split, please see the Company’s definitive proxy statement on Schedule 14A, filed with the Commission on October 18, 2024.

 

Item 9.01

Financial Statements and Exhibits.

 

(d) Exhibits.

 

3.1

Certificate of Amendment, filed December 3, 2024, to effect the 1-for-5,000 Reverse Stock Split.

3.2

Certificate of Amendment, filed December 3, 2024, to effect the 5,000-for-1 Forward Stock Split.

99.1

Press release, dated December 2, 2024.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	PSYCHEMEDICS CORPORATION
Date: December 3, 2024
	By:	/s/ Brian Hullinger
	Name:	Brian Hullinger
	Title:	President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

Exhibit 3.1

 

CERTIFICATE OF AMENDMENT OF

 

PSYCHEMEDICS CORPORATION

 

Pursuant to Section 242 of the Delaware General Corporation Law, Psychemedics Corporation, a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), does hereby certify as follows:

 

FIRST: Article FOURTH of the Amended and Restated Certificate of Incorporation of the Corporation is hereby amended by adding the following new paragraph at the end thereof:

 

“Upon the effectiveness of the Certificate of Amendment of this Amended and Restated Certificate of Incorporation containing this sentence (the “Effective Time”), each 4,000 to 6,000 shares of the common stock, par value $.005 per share, of the corporation issued and outstanding or issued and held in the treasury of the corporation immediately prior to the Effective Time (the “Old Common Stock”) shall automatically, without any action on the part of the holders of the Old Common Stock, be reclassified, changed and combined into 1 share of common stock, par value $.005 per share, of the corporation (the “New Common Stock”), the exact ratio within the 4,000-6,000 range to be determined by the Board of Directors of the corporation and publicly announced by the corporation (“Reverse Stock Split” and such number within the 4,000-6,000 range selected to determine such ratio, the “Minimum Number”); provided that no fractional shares or interests shall be issued to any holder who immediately prior to the Effective Time holds fewer than the Minimum Number of shares of Old Common Stock (any such holder, a “Cash Out Stockholder”), and that instead of issuing such fractional shares or interests, the corporation shall, pursuant to Section 155(2) of the Delaware General Corporation Law, pay in cash the fair value of such fractions of a share or interest as of the Effective Time, which the Board of Directors has determined to be the applicable fractional amount multiplied by $2.35. It is the intention and purpose of this paragraph for the persons who would otherwise be holder(s) of fractional shares or interests to be dealt with consistent with Applebaum v. Avaya, Inc., 812 A.2d 880 (Del. 2002), such that a beneficial owner who held shares of Old Common Stock in street name through a nominee (such as a bank or broker) immediately prior to the Effective Time will be treated in the same manner as shareholders whose shares of Old Common Stock are registered in their names immediately prior to the Effective Time, and nominees will be instructed to effect such treatment for their beneficial holders, and this paragraph shall be interpreted, applied and construed to that effect.”

 

 

SECOND: On November 25, 2024, the Board of Directors of the Corporation determined that each 5,000 shares of the Old Common Stock issued and outstanding or issued and held in the treasury of the Corporation immediately prior to the Effective Time shall automatically be reclassified and combined into one validly issued, fully paid and non-assessable share of New Common Stock. The Corporation publicly announced this ratio on December 2, 2024.

 

THIRD: This amendment of the Amended and Restated Certificate of Incorporation herein certified has been duly adopted in accordance with the provisions of Section 242 of the Delaware General Corporation Law and shall become effective at 5:01 p.m., Eastern time, on December 3, 2024.

 

 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its duly authorized officer on the date set forth below.

 

 

	PSYCHEMEDICS CORPORATION
	By:	/s/ Brian Hullinger
		Name: Brian Hullinger
		Title: President and Chief Executive Officer
	Date:	December 3, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 3.2

 

CERTIFICATE OF AMENDMENT OF

amended and restated CERTIFICATE OF INCORPORATION OF

PSYCHEMEDICS CORPORATION

 

Pursuant to Section 242 of the Delaware General Corporation Law, Psychemedics Corporation, a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), does hereby certify as follows:

 

FIRST: Article FOURTH of the Amended and Restated Certificate of Incorporation of the Corporation is hereby amended by adding the following new paragraph at the end thereof:

 

“Upon the effectiveness of the Certificate of Amendment of this Amended and Restated Certificate of Incorporation containing this sentence (the “Forward Effective Time”), each 1 share of the common stock, par value $.005 per share, of the corporation issued and outstanding or issued and held in the treasury of the corporation (and including each fractional share in excess of 1 share held by any stockholder) immediately prior to the Forward Effective Time (the “Forward Old Common Stock”) shall automatically, without any action on the part of the holders of the Forward Old Common Stock, be reclassified, changed and subdivided into 4,000 to 6,000 shares of common stock, par value $.005 per share, of the corporation (the “Forward New Common Stock”) (or, with respect to such fractional shares, such lesser number of shares as may be applicable based upon such ratio), the exact ratio within the 4,000-6,000 range to be determined by the Board of Directors of the corporation and publicly announced by the corporation; provided, for the avoidance of doubt, no fractional shares or interests that would have been held by a Cash Out Stockholder immediately following the Reverse Stock Split will be so reclassified, changed and subdivided as, in lieu of issuing such fractional shares or interests, the corporation has paid or will pay in cash the fair value of such fractional shares or interests.”

 

SECOND: On November 25, 2024, the Board of Directors of the Corporation determined that each share of the Forward Old Common Stock issued and outstanding or issued and held in the treasury of the Corporation immediately prior to the Effective Time shall automatically be reclassified and subdivided into 5,000 validly issued, fully paid and non-assessable shares of Forward New Common Stock. The Corporation publicly announced this ratio on December 2, 2024.

 

THIRD: This amendment of the Amended and Restated Certificate of Incorporation herein certified has been duly adopted in accordance with the provisions of Section 242 of the Delaware General Corporation Law and shall become effective at 5:02 p.m., Eastern time, on December 3, 2024.

 

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its duly authorized officer on the date set forth below.

 

 

 

	PSYCHEMEDICS CORPORATION
	By:	/s/ Brian Hullinger
		Name: Brian Hullinger
		Title: President and Chief Executive Officer
	Date:	December 3, 2024

 

 

 

 

 

 

EXHIBIT 99.1

Psychemedics Corporation Announces Reverse and Forward Stock Split

DALLAS, Dec. 02, 2024 (GLOBE NEWSWIRE) -- Psychemedics Corporation (Nasdaq: PMD) (the “Company”), the world’s leading provider of hair testing for drugs of abuse, today announced that, following the approval of the Company’s stockholders at its Annual Meeting of Stockholders held on November 25, 2024, the Company’s Board of Directors has approved a 1-for-5,000 reverse stock split of its common stock (the “Reverse Stock Split”) followed immediately by a 5,000-for-1 forward stock split of its common stock (the “Forward Stock Split,” and together with the Reverse Stock Split, the “Stock Split”), to be effective at 5:01 p.m. and 5:02 p.m., Eastern Time, respectively, on Tuesday, December 3, 2024. Beginning with the opening of trading on Wednesday, December 4, 2024, the Company’s common stock will continue to trade on the Nasdaq Capital Market on a post-Forward Stock Split basis under the existing symbol “PMD”.

Stockholders who hold fewer than 5,000 shares immediately prior to the Reverse Stock Split will be paid $2.35 in cash, without interest, for each share of the Company’s common stock held by them at the effective time of the Reverse Stock Split, and thereafter they will no longer be stockholders of the Company. Stockholders owning more than 5,000 shares of the Company’s common stock at the effective time of the Reverse Stock Split (the “Continuing Stockholders”) will not be entitled to receive any cash for their fractional share interests resulting from the Reverse Stock Split, if any. The Forward Stock Split, which will immediately follow the Reverse Stock Split, will reconvert whole shares and fractional share interests held by the Continuing Stockholders back into the same number of shares of common stock held by such Continuing Stockholders immediately before the effective time of the Reverse Stock Split. As a result of the Forward Stock Split, the total number of shares of the Company’s common stock held by a Continuing Stockholder will not change as a result of the Reverse Stock Split. 

Computershare Trust Company, N.A. is acting as exchange and paying agent for the Stock Split. Registered stockholders holding pre-split shares of the Company’s common stock electronically in book-entry form are not required to take any action to receive post-split shares. Stockholders owning shares via a broker, bank, trust or other nominee will have their positions automatically adjusted to reflect the Stock Split, subject to such broker’s particular processes, and will not be required to take any action in connection with the Stock Split.

As previously announced, the Company is undertaking the Stock Split in connection with the proposed delisting of its common stock from The Nasdaq Stock Market and the deregistration of its common stock under Section 12(g) of the Securities Exchange Act of 1934, as amended, to avoid the substantial cost and expense of being a public reporting company and to allow the Company to have more time to focus on managing the Company’s businesses and undertaking new initiatives that may result in greater long-term growth and increased stockholder value. The Company anticipates savings exceeding $845,000 on an annual basis as a result of the proposed deregistration and delisting transaction.

Additional information about the Stock Split can be found in the Company’s definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission (the “SEC”) on October 18, 2024.

About Psychemedics Corporation

Psychemedics Corporation is the world’s leading provider of hair testing for the detection of drugs of abuse. The Company’s patented process is used by thousands of U.S. and international clients, including Fortune 500 companies, for pre-employment and random drug testing. Major police departments, Federal Reserve banks, schools, and other public entities also rely on our unique patented drug testing process. We strongly believe our drug testing method to be superior to any other product currently in use, including traditional urine testing and other hair testing methods. To learn more, visit www.psychemedics.com.

Use of Forward-Looking Statements

Cautionary Statement for purposes of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995: From time to time, information provided by the Company may contain forward-looking information that involves risks and uncertainties. In particular, statements contained in this press release that are not historical facts may be “forward looking” statements, including, but not limited to, statements concerning the timing and effectiveness of the implementation of the Stock Split, the deregistration and delisting of the Company’s common stock, and the perceived benefits and costs of the proposed transaction. Actual results may differ from those stated in any forward-looking statements. Factors that may cause such differences include but are not limited to risks associated with the changes in U.S. and foreign government regulations, including but not limited to U.S. Food and Drug Administration regulations, research and development spending, competition (including, without limitation, competition from other companies pursuing the same growth opportunities), the Company’s ability to maintain its reputation and brand image, the ability of the Company to achieve its business plans, cost controls, leveraging of its operating platform, risks of information technology system failures and data security breaches, the uncertain global economy, the Company’s ability to attract, develop and retain executives and other qualified employees and independent contractors, including distributors, the Company’s ability to obtain and protect intellectual property rights, litigation risks, general economic conditions and other factors disclosed in the Company’s filings with the SEC. The forward-looking statements contained herein speak only of the Company's expectations as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in the Company's expectations or any change in events, conditions, or circumstances on which any such statement is based.

Psychemedics Investor Contact:

Daniella Mehalik
VP of Finance
(800) 628-8073
DaniellaM@psychemedics.com

v3.24.3

Cover	Dec. 03, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 03, 2024
Entity File Number	1-13738
Entity Registrant Name	PSYCHEMEDICS CORPORATION
Entity Central Index Key	0000806517
Entity Tax Identification Number	58-1701987
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	5220 Spring Valley Road
Entity Address, Address Line Two	Suite 230
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75254
City Area Code	(800)
Local Phone Number	527-7424
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock, $0.005 par value per share
Trading Symbol	PMD
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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