Aurora Cannabis (ACB -1.15%) will soon have considerably fewer shares of common stock outstanding.

The company announced it is planning a 1-for-12 reverse stock split. This would reduce its outstanding share count from just over 1.3 billion to just under 109.5 million, assuming no additional stock is issued before that happens.

Aurora says the consolidation will occur on or about May 11. For most shareholders, this process will be automatic, although owners of physical stock certificates will need to complete and mail official paperwork in order to receive certificates for the newly consolidated stock.

A small collection of stock certificates.

Image source: Getty Images.

Reverse stock splits are relatively rare occurrences. Aurora is doing this one because otherwise, it is at serious risk of being delisted from the New York Stock Exchange (NYSE). As per the Exchange's listing standards, a listed stock cannot trade below an average of $1 for 30 consecutive days; Aurora's stock has closed under $1 consistently since late March.

The decision was announced in an investor update Aurora published on Monday. The marijuana company said that its "business transformation targets" were being met. These include cuts in operating costs and capital expenditures, and what it terms "reducing complexity in the organization." It also reaffirmed its revenue guidance for the third quarter of its fiscal 2020, saying that it still expects "modest" quarter-over-quarter growth.

Aurora also aims to raise more capital. It said in the update that it will refresh its at-the-market program, under which it will sell as much as $350 million in stock.

The company's already-precarious share price took another hit on the news, falling by 13% on Monday. This was significantly steeper than the declines recorded by the major equities indexes on the day.