TEL AVIV - A2Z Cust2Mate Solutions Corp. (NASDAQ:AZ)(FRA - WKN:A3CSQ), a technology solutions provider, has announced a reverse share split of its common shares, which is set to take effect on October 8, 2024. The reverse share split, at a ratio of 1-for-2.5, is primarily aimed at complying with the Nasdaq's minimum bid price requirement.
The restructuring will reduce the number of the company's common shares from 62,241,236 to 24,896,494, with no change to the par value of the shares. As a result of the reverse split, the company's common shares will continue to trade on the Nasdaq Capital Market under the ticker symbol "AZ" and will be assigned a new CUSIP number 002205102.
This corporate action will also adjust outstanding share options, pre-funded warrants, share purchase warrants, and other convertible securities of the company on the same ratio. No fractional shares will be issued; all fractional shares will be rounded up to the next whole number.
Shareholders do not need to take any action if their shares are held through a broker, bank, trust, or other nominee, as their accounts will be automatically adjusted. However, registered shareholders with physical certificates will need to send their certificates with a letter of transmittal to receive new certificates reflecting the post-split amount.
The reverse share split is a strategic move to maintain compliance with Nasdaq's listing standards, specifically the $1.00 minimum bid price requirement. However, the company has stated there is no guarantee that this will ensure compliance with the minimum bid price requirement.
A2Z Cust2Mate Solutions Corp. is known for its smart shopping cart solutions, which aim to revolutionize the retail shopping experience by incorporating digital technology. The company's products are designed to improve customer satisfaction and loyalty, reduce shrinkage, and optimize retailer operations.
The information regarding the reverse share split is based on a press release statement issued by the company.
In other recent news, A2Z Cust2Mate Solutions Corp. has announced a registered direct offering of over 5 million common shares at $0.75 each, with proceeds intended for working capital and general corporate purposes. Recent developments also include the establishment of new global framework agreements with Nayax Capital, providing financing options for the sale or lease of A2Z's smart carts. Furthermore, A2Z Cust2Mate and Nayax Ltd. have formed a strategic alliance to launch a new smart cart technology, Cust2Mate 3.0, with the first carts launching in France.
In addition, A2Z Cust2Mate has expanded its smart cart technology in Paris, debuting its next-generation Cust2Mate 3.0 smart shopping carts at a Monoprix franchise store. This marks the first implementation in collaboration with IR2S, a retail technology integrator, with a goal to deploy 30,000 smart carts across various French retail chains by 2026.
These recent developments, based on statements from both A2Z Cust2Mate Solutions Corp. and Nayax Ltd., are subject to risks and uncertainties that could affect actual results. The companies' expectations and potential market impacts are based on current management beliefs and available information.
InvestingPro Insights
A2Z Cust2Mate Solutions Corp.'s decision to implement a reverse share split comes at a critical time for the company, as reflected in recent financial data and market performance. According to InvestingPro data, the company's market capitalization stands at $42.5 million USD, with a revenue of $7.14 million USD for the last twelve months as of Q2 2024. However, the company faces significant challenges, as evidenced by its negative operating income of -$16.54 million USD over the same period.
InvestingPro Tips highlight that A2Z is "quickly burning through cash" and "not profitable over the last twelve months," which underscores the urgency of the reverse split to maintain Nasdaq listing compliance. The company's stock has shown strong returns over the last month (34.34%) and three months (109.99%), possibly reflecting market anticipation of this corporate action.
Despite these recent gains, A2Z "suffers from weak gross profit margins," with a gross profit margin of just 5.81% in the last twelve months. This aligns with another InvestingPro Tip indicating that the company "operates with a moderate level of debt," which could be concerning given its cash burn rate.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for A2Z Cust2Mate Solutions Corp., providing a deeper understanding of the company's financial health and market position. These insights could be particularly valuable as the company navigates this critical period post-reverse split.
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