NEW YORK - Color Star Technology Co., Ltd. (NASDAQ:ADD), an entertainment and education company, has announced a 100-for-1 reverse share split of its Class A and Class B ordinary shares. The reverse split is expected to take effect as trading commences on the Nasdaq Capital Market on November 15, 2024.
The decision for the reverse share split was approved by shareholders on September 29, 2024, and is aimed at reducing the number of outstanding shares from approximately 70 million Class A Ordinary Shares and 1.2 million Class B Ordinary Shares to about 0.7 million and 12,000 shares respectively. This adjustment will be made with all fractional shares rounded up to the nearest whole share.
In conjunction with the reverse split, the authorized capital of Color Star will be increased to USD$32 million, divided into 280 billion Class A and 40 billion Class B ordinary shares, each with a par value of USD$0.0001 per share. Transhare Corporation, the company's transfer agent, will manage the exchange process for the reverse split.
Shareholders holding shares in book entry form will have their holdings automatically adjusted to reflect the reverse split. Those holding shares in "street name" through a bank, broker, or nominee will also be adjusted, although the process may vary depending on the policies of the individual banks or brokers.
Post-reverse split, the company's Class A Ordinary Shares will continue to trade on the Nasdaq Capital Market under the ticker symbol "ADD" and a new CUSIP number, G2287A126.
Color Star Technology operates through its subsidiaries, Color Metaverse Pte. Ltd. and CACM Group NY, Inc., offering online entertainment performances and music education services via its Color World platform.
This news is based on a press release statement and contains forward-looking statements, which involve risks and uncertainties. These statements are not guarantees of future performance and actual results could differ materially from those projected. Investors are advised to consult additional filings with the U.S. Securities and Exchange Commission for further information.
In other recent news, Color Star Technology Co., Ltd. has regained compliance with the Nasdaq's minimum bid price requirement. The company's shares have closed at or above $1.00 for ten consecutive business days, satisfying Nasdaq's Listing Rule 5550(a)(2) and resolving the bid price deficiency issue. These developments are crucial to the company's continued listing on the Nasdaq and can impact investor perception and the ability to raise capital.
In addition, Color Star has made forward-looking statements regarding its future business development, including plans for metaverse projects. These statements, while providing insight into the company's potential future directions, carry inherent risks and uncertainties that could affect actual results. Investors are advised to consider these risks and uncertainties in their decision-making process.
These recent developments reflect the company's current adherence to market regulations and its overall financial health. It's important to note that this information is based on press release statements from Color Star Technology Co., Ltd., and investors should refer to the company's filings with the U.S. Securities and Exchange Commission for further details.
InvestingPro Insights
As Color Star Technology Co., Ltd. (NASDAQ:ADD) prepares for its 100-for-1 reverse share split, InvestingPro data provides additional context for investors. The company's market capitalization stands at a modest $6.73 million, reflecting its current position in the market.
The stock's recent performance has been challenging, with InvestingPro data showing a significant 21.56% decline in the past week and a 32.23% drop over the last month. This aligns with two key InvestingPro Tips: "Stock has taken a big hit over the last week" and "Stock has fared poorly over the last month." These trends underscore the volatility that Color Star investors have experienced recently, which may have contributed to the decision for a reverse split.
Furthermore, Color Star's price-to-book ratio of 0.36 indicates that the stock is trading below its book value. This is reflected in the InvestingPro Tip that the stock is "Trading at a low Price / Book multiple." This metric could be of particular interest to value investors looking at the company's fundamentals in light of the upcoming reverse split.
For a more comprehensive analysis, InvestingPro offers additional tips and metrics that could provide valuable insights into Color Star's financial health and market position. Currently, there are 14 additional tips available on the InvestingPro platform for ADD stock.
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