NEW YORK - UTime Limited (NASDAQ:WTO), a mobile device manufacturer known for its cost-effective products, is set to undergo a reverse stock split in an effort to comply with Nasdaq's minimum bid price requirement. The company stated that it will effect a reverse share split of its outstanding ordinary shares at a ratio of 1-for-25, with the change expected to take place at the opening of trading on or around September 11, 2024.
This corporate action aims to bring the company's ordinary share price above the $1.00 threshold, a condition for continued listing on the Nasdaq Capital Market. UTime's shares, post-split, will retain their par value of $0.0001 and will trade under the current ticker symbol WTO, with a new CUSIP number, G9411M116.
As a result of the reverse split, the total number of UTime's issued and outstanding shares will decrease from approximately 450 million to about 18 million. Shareholders approved this measure on August 28, 2024, reflecting a strategic move to enhance the company's market position.
No fractional shares will be issued in connection with the reverse split. Shareholders who would otherwise hold a fractional share will have their holdings rounded up to the nearest whole number. The adjustment also extends to the ordinary shares issuable upon the exercise of the company's outstanding derivative securities, with exercise prices and number of derivatives to be proportionately adjusted.
For shareholders holding shares in book-entry form or through brokerage accounts, no action is required as VStock Transfer, LLC, the exchange and paying agent for the reverse share split, will handle the necessary adjustments. Shareholders with physical share certificates will receive instructions from VStock Transfer, LLC on the exchange process for post-reverse share split ownership.
UTime Ltd., which has expanded its product lines to include smart electric vehicle chargers since July 2023, continues to focus on providing accessible mobile technology to low-income individuals in both established and emerging markets.
The company's forward-looking statements regarding its ability to meet Nasdaq's continued listing requirements are based on current expectations and are subject to various risks and uncertainties. The information provided in this article is based on a press release statement from UTime Limited.
In other recent news, UTime Limited has reached an agreement to acquire Bowen Therapeutics Inc, aiming to advance the development of a monkeypox vaccine. This move is in response to increasing global demand due to recent monkeypox outbreaks. The acquisition will position UTime at the forefront of ongoing clinical trials and future vaccine development programs, with the company planning to expedite the FDA registration process for the monkeypox vaccine. Completion of the transaction is pending customary closing conditions and regulatory approvals.
Another recent development for UTime Limited is the successful regain of compliance with the Nasdaq's minimum bid price requirement. This was achieved after the company's shares consistently closed at $1.00 or higher for 11 consecutive business days, satisfying Nasdaq Listing Rule 5550(a)(2).
Furthermore, UTime has expanded its product portfolio to include smart electric vehicle chargers since July 2023, aligning with global efforts towards energy conservation and carbon reduction. However, UTime has not yet disclosed additional details about its future plans or prospects.
InvestingPro Insights
In light of UTime Limited's (NASDAQ:WTO) upcoming reverse stock split, a closer examination of the company's financial health and stock performance through InvestingPro metrics provides additional context for investors. According to InvestingPro data, UTime's market capitalization stands at a modest 28.41 million USD. The company's Price / Book ratio, as of the last twelve months leading up to Q4 2024, is 0.57, which is considered low and could indicate that the stock is potentially undervalued relative to its book value.
However, the financial data also highlight some challenges. UTime has been quickly burning through cash, as reflected in its negative free cash flow yield, a valuation metric that is concerning to investors looking for financial stability. Moreover, the company's gross profit margins are weak, with a gross profit margin of just 5.15% in the same period. These figures suggest that UTime is facing difficulties in translating sales into profits efficiently.
The stock's price volatility is also noteworthy. Over the last week, the stock has experienced a significant price total return decrease of -12.7%, and over the last month, the decline has been even more pronounced at -94.5%. This high price volatility is a trend that investors should be aware of, especially in the context of the reverse stock split which is intended to stabilize the share price.
For investors seeking a deeper dive, there are additional InvestingPro Tips available. These tips include insights on the company's cash burn rate and stock performance over various timeframes, such as the last month, quarter, and year. In total, there are more than ten additional tips listed on InvestingPro that could further guide investment decisions regarding UTime Limited. Access to these tips and more comprehensive data can be found at InvestingPro.
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