NEW YORK - U-BX Technology Ltd. (NASDAQ:UBXG), a company specializing in artificial intelligence-driven services for the insurance industry, revealed that it will execute a reverse stock split of its ordinary shares at a ratio of 1-for-16. This decision follows the approval by shareholders at the annual meeting on October 24, 2024, and the subsequent determination of the split ratio by the Board of Directors on November 2, 2024.
The company's ordinary shares are set to begin trading on an adjusted basis to reflect the reverse stock split on November 27, 2024, under the current ticker symbol UBXG. As a result of the reverse stock split, the total number of outstanding ordinary shares will decrease from approximately 29.7 million to around 1.9 million. The reverse stock split also prompts an amendment to the company's Memorandum of Association, adjusting the number of authorized shares and changing the par value to $0.0016 per share post-split.
Shareholders will not receive fractional shares with the reverse stock split. Instead, those entitled to a fractional share will be issued one full share. Further details regarding the reverse stock split are available in U-BX's notice of annual general meeting filed with the Securities and Exchange Commission on October 8, 2024.
Headquartered in Beijing, U-BX Technology Ltd. provides a range of value-added services using AI technology to clients within the insurance sector, including digital promotion, risk assessment, and bundled benefits packages for insurance carriers.
This announcement is based on a press release statement and contains information that is forward-looking in nature. U-BX Technology Ltd. has emphasized that such statements are subject to risks and uncertainties and that actual results may differ from those projected. The company does not commit to updating these forward-looking statements post-release.
In other recent news, U-BX Technology Ltd. has been alerted by Nasdaq about its non-compliance with the exchange's listing requirements. The AI-driven services company has until April 2025 to meet the standards or potentially face delisting. The Nasdaq Listings Qualifications Department issued two notices to U-BX, indicating that the company's share price and market value have fallen below the required thresholds. U-BX has been given 180 days to regain compliance.
The trading of U-BX's securities on Nasdaq is currently unaffected. If the company's share price reaches $1.00 or more for at least ten consecutive business days, or if its market value of listed securities hits $35 million or more for the same duration within this period, Nasdaq will confirm the company's compliance. In case U-BX does not meet these requirements by the April 2025 deadline, it may qualify for an additional 180-day grace period. The Beijing-based company is actively monitoring its share price and market value and is exploring options to regain compliance with Nasdaq's continued listing standards. These are the recent developments concerning U-BX Technology Ltd.
InvestingPro Insights
As U-BX Technology Ltd. (NASDAQ:UBXG) prepares for its reverse stock split, InvestingPro data provides additional context to the company's financial situation. The company's revenue for the last twelve months as of Q4 2024 stands at $51.6 million, with a concerning revenue growth decline of -45.29% over the same period. This decline is further emphasized by the quarterly revenue drop of -41.03% in Q4 2024.
InvestingPro Tips highlight that UBXG is "trading at a low Price / Book multiple" of 0.63, which could indicate that the stock is undervalued relative to its assets. This metric becomes particularly relevant in light of the upcoming reverse stock split, as it may affect the company's valuation metrics.
Another InvestingPro Tip notes that the company is "quickly burning through cash," which aligns with the negative EBITDA of -$0.87 million and the significant EBITDA growth decline of -655.21% over the last twelve months. This cash burn rate could be a driving factor behind the company's decision to implement a reverse stock split, potentially as part of a strategy to maintain listing requirements or attract new investors.
The stock's performance has been notably poor, with InvestingPro data showing a 1-year price total return of -92.85% as of the 330th day of 2024. This substantial decline underscores the challenges facing UBXG and provides context for the company's decision to pursue a reverse stock split.
For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips for UBXG, providing a deeper understanding of the company's financial health and market position.
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