LONDON - Zapp Electric Vehicles Group Limited (NASDAQ:ZAPP), a British electric vehicle brand, announced Monday that its shareholders have approved a reverse stock split at its annual general meeting held on April 11, 2024.
The reverse stock split, at a ratio of 1-for-20, is set to take effect after market close on April 22, 2024, with shares trading on a split-adjusted basis on the Nasdaq Global Market from April 23, 2024.
The consolidation will reduce the number of ordinary shares from 500 million to 25 million, maintaining the company's authorized share capital at $50,000. Post-split, the nominal value of shares will increase from $0.0001 to $0.002. The company's ticker symbol, ZAPP, will remain unchanged, although it will trade under a new CUSIP number.
In the reverse stock split, every 20 existing ordinary shares will be converted into one new ordinary share. Shareholders who would receive fractional shares due to the consolidation will instead be rounded up to the nearest whole new ordinary share. This adjustment will not affect shareholders' percentage interest in Zapp EV's equity capital, except for minor changes due to rounding.
The terms of outstanding warrants and equity-based awards will also be adjusted. Specifically, the 26,437,500 public warrants issued during the business combination with CIIG Capital Partners II, Inc. will now entitle holders to purchase one new ordinary share for every twenty warrants at an increased exercise price of $230.00 per new ordinary share, up from the previous $11.50.
Zapp EV, known for its i300 urban electric high-performance two-wheeler, operates a direct-to-customer model, delivering vehicles to buyers' homes. The company's product lineup is aimed at redefining the electric two-wheeler segment.
This announcement is based on a press release statement from Zapp Electric Vehicles Group Limited. The forward-looking statements included in the press release are subject to risks and uncertainties, and actual results may differ materially. These statements do not guarantee future performance and are provided for informational purposes.
InvestingPro Insights
In light of Zapp Electric Vehicles Group Limited's (NASDAQ:ZAPP) announcement regarding the reverse stock split, investors are closely monitoring the company's financial health and stock performance. According to InvestingPro data, Zapp's market capitalization stands at a modest $15.63 million.
The company has been grappling with financial challenges, as highlighted by a negative price-to-earnings (P/E) ratio of -0.2 over the last twelve months as of Q4 2023. This figure underscores the company's lack of profitability during this period. Additionally, Zapp's operating income shows a significant loss of $7.8 million, further indicating financial strain.
InvestingPro Tips suggest that Zapp is quickly burning through cash and has been struggling with weak gross profit margins. Moreover, the company's stock is known for high price volatility and has seen a dramatic price drop, with a 97.34% decline in the one-year price total return as of the current year. These factors are critical for investors to consider, especially in the context of the recent reverse stock split, which is often viewed as a measure to bolster a stock's market price and avoid delisting.
For those looking to dive deeper into Zapp's financial metrics and stock performance, additional InvestingPro Tips are available. There are 10 more tips that provide insights into the company's financial health and stock trends, which can be a valuable resource for investors making informed decisions. To access these insights and for a more comprehensive analysis, visit InvestingPro. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.