NEW YORK - Fresh2 Group Ltd. (NASDAQ: FRES), a business-to-business e-commerce and supply chain management company specializing in the restaurant and food industry, announced today that it will modify the ratio of its American depositary shares (ADSs) to Class A ordinary shares.
The alteration will shift the ratio from one ADS representing twenty Class A ordinary shares to one ADS representing two hundred Class A ordinary shares. This change is expected to take effect on or about July 10, 2024.
This adjustment will act similarly to a one-for-ten reverse ADS split for the company's ADS holders. However, there will be no alteration to the Class A ordinary shares. On the effective date, registered holders of the company's certificated ADSs will be required to surrender their shares to Citibank, N.A., the depositary bank, for cancellation. In exchange, they will receive one new ADS for every ten existing ADSs surrendered.
Those holding uncertificated ADSs within the Direct Registration System (DRS) and The Depository Trust Company (DTC) will have their shares automatically exchanged and are not required to take any further action.
The company's ADSs will continue trading on The Nasdaq Capital Market under the ticker symbol FRES. No fractional new ADSs will be issued. Instead, fractional entitlements will be aggregated, sold by the depositary, and the net proceeds, after deductions, will be distributed to the applicable ADS holders.
Fresh2 Group anticipates that the price of ADSs will increase proportionally following the ratio change, although it cannot guarantee that the post-change ADS price will be equal to or greater than twenty times the pre-change price.
Fresh2 Group is focused on aiding restaurants in reducing procurement costs and enhancing efficiency through its advanced supply chain management system. The company leverages strategic digital technologies and innovative business models to transform the online restaurant supply sector. The aim is to streamline restaurant operations, contribute substantial value to the food industry, and establish a global network of restaurateurs in the digital era.
The information in this article is based on a press release statement from Fresh2 Group Ltd.
In other recent news, Fresh2 Group Ltd. disclosed that it has received a Nasdaq delinquency notice due to a delay in filing its annual report, thereby breaching Nasdaq's Listing Rule 5250(c)(1). The company was alerted by the Nasdaq Listing Qualifications Department about its failure to file the Annual Report on Form 10-K for the fiscal year that ended on December 31, 2023.
Fresh2 Group has been given 60 days to submit a plan to regain compliance, with the company announcing its intention to present this plan. If Nasdaq accepts the company's compliance plan, Fresh2 may receive an extension of up to 180 days from the original due date of the Form 10-K to meet the listing rule requirements. In case Nasdaq rejects the plan, Fresh2 retains the right to appeal the decision before a Hearings Panel.
These are the recent developments surrounding the company. Remember, the company's forward-looking statements are based on management's expectations and projections, which are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those anticipated.
InvestingPro Insights
As Fresh2 Group Ltd. (NASDAQ: FRES) faces a significant transition with its upcoming ADS ratio modification, the financial metrics and analyst insights from InvestingPro reveal a broader picture of the company's performance and challenges.
InvestingPro Data shows that Fresh2 Group's market capitalization currently stands at a modest 7.18 million USD. Despite a notable revenue growth of 94.5% in the last twelve months as of Q2 2023, the company's operating income margin is deeply negative at -698.85%, reflecting substantial challenges in profitability. Additionally, the gross profit margin during the same period was 54.38%, indicating that while the company is generating revenue, it is not translating efficiently into operating income.
From an investment standpoint, Fresh2 Group's valuation implies a poor free cash flow yield, as highlighted in one of the InvestingPro Tips. This could be a concern for potential investors looking for companies with strong cash generation capabilities. Moreover, the company's stock has been trading near its 52-week low and has experienced a significant price drop over the last year, which may suggest investor skepticism about the company's future prospects.
Investors seeking deeper insights can find an additional 13 tips on Fresh2 Group Ltd. at https://www.investing.com/pro/FRES. These tips provide a comprehensive analysis of the company's financial health and market performance, which could be particularly valuable in light of the upcoming ADS ratio change.
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