Grove Collaborative (NYSE: GROV), which completed a merger transaction with Virgin Group II in June 2022, announced this afternoon that it will implement a 1-for-5 reverse split of its common stock.

The company gained shareholder approval for the reverse stock split at a special meeting held yesterday and will be effective after market close on June 5. GROV’s common stock will trade on a post-split basis when the market opens on June 6.

At the effective time, every five issued and outstanding shares of GROV’s common stock will be converted into one share of common stock. The reverse stock split will reduce the number of shares of class A common stock issued and outstanding from approximately 129 million to 26 million, and the number of shares of class B common stock issued and outstanding from approximately 50 million to 10 million.

As a result of the reverse stock split, all outstanding public warrants to purchase GROV’s class A common stock will also be proportionately adjusted. Correspondingly, the exercise price per share of class A common stock attributable to such warrants prior to the reverse stock split has been proportionately increased from $11.50 to $57.50.

Additionally, the number of shares of GROV’s class A common stock subject to the public warrants will be decreased by five times, to an aggregate of 1,610,000 shares.

Grove Collaborative intends to use this reverse stock split to increase the market price per share of common stock to enhance its ability to regain compliance with the NYSE and to improve the marketability and liquidity of its common stock. In December 2022, just six months after the company went public, Grove received a notice from the NYSE that it was no longer in compliance with the stock exchange’s continued listing standards around minimum average share price.

If the price of GROV’s class A common stock remains above $1 per share for 30 trading days following the effective time of the reverse stock split, then Grove will be deemed to have regained compliance with the NYSE.