Fresh2 Group announces ADS ratio change effective July 10

NEW YORK - Fresh2 Group Ltd. (NASDAQ: FRES), a B2B e-commerce and supply chain management company in the restaurant and food industry, has announced a change in its American depositary shares (ADSs) structure. The alteration will modify the ratio of its ADSs to Class A ordinary shares from one ADS representing twenty Class A ordinary shares to one ADS representing two hundred Class A ordinary shares. This change, which is akin to a one-for-ten reverse ADS split for the company's ADS holders, is scheduled to take effect on July 10, 2024.

On the effective date, registered holders of Fresh2's ADSs in certificated form will be obligated to exchange their certificates with Citibank, N.A., the depositary bank, to receive new ADSs. For every ten existing ADSs surrendered, one new ADS will be issued. Holders of uncertificated ADSs, either in the Direct Registration System or with The Depository Trust Company, will have their holdings automatically adjusted without the need for any action on their part.

No fractional new ADSs will be issued as part of this adjustment. Instead, fractional ADS entitlements will be aggregated, sold by the depositary, and the net cash proceeds, after deductions, will be distributed to the applicable ADS holders.

While the ADS Ratio Change is expected to proportionally increase the ADS price, Fresh2 has stated that there can be no assurance that the post-change ADS price will be equal to or greater than ten times the pre-change price. The company's ADSs will continue trading on The Nasdaq Capital Market under the ticker symbol FRES.

Fresh2 Group Limited specializes in helping restaurants reduce procurement costs and enhance efficiency through advanced supply chain management systems and strategic digital technologies. The company is focused on transforming the online restaurant supply industry and building a global network of restaurateurs in the digital era.

"In other recent news, Fresh2 Group Ltd. has received a delinquency notice from Nasdaq due to a delay in filing its annual report, indicating non-compliance with listing rules. The company was alerted by the Listing Qualifications Department of The Nasdaq Stock Market about its failure to submit the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, in a timely manner. This delay infringes upon Nasdaq's Listing Rule 5250(c)(1), which necessitates the prompt submission of all required periodic financial reports.

In response to this notice, Fresh2 has been granted 60 days to propose a plan to regain compliance, which it intends to present by June 17, 2024. If Nasdaq approves Fresh2's compliance plan, the company may receive an extension of up to 180 calendar days from the original due date of the Form 10-K to comply with the listing rule requirements. This could potentially extend the deadline until October 14, 2024.

In the event of Nasdaq rejecting the plan, Fresh2 maintains the right to appeal the decision before a Hearings Panel. These are recent developments concerning Fresh2 Group Ltd., a company that operates in the business-to-business e-commerce and supply chain management sector for the restaurant and food industry."

InvestingPro Insights

As Fresh2 Group Ltd. (NASDAQ: FRES) prepares for its ADS ratio change, investors may be weighing the potential impacts on the company's stock performance. According to InvestingPro, analysts foresee sales growth in the current year, which could signal a positive outlook for the company's revenue stream. However, it's important to note that Fresh2 has been quickly depleting its cash reserves, an issue that investors should monitor closely.

Examining the company's financial health, InvestingPro data reveals a market capitalization of $7.78 million USD, which places Fresh2 in the smaller spectrum of publicly traded companies. The data also indicates a negative P/E ratio (adjusted) of -0.46 for the last twelve months as of Q2 2024, reflecting investor concerns about profitability. Additionally, Fresh2's price/book ratio of 0.58 suggests that the company's stock may be undervalued relative to its book value, potentially offering an attractive entry point for value investors.

The company's stock has experienced significant volatility, with a 1-year price total return of -91.76%, highlighting the risks associated with investing in Fresh2. The lack of dividend payments to shareholders further emphasizes the need for prospective investors to consider growth prospects and the potential for capital gains over income generation.

For those interested in a deeper analysis, InvestingPro offers additional insights and tips for Fresh2, including observations on the company's gross profit margins and free cash flow yield. With these tools, investors can make more informed decisions, especially in light of the upcoming ADS ratio change. To explore these insights further, consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. In total, there are 9 additional InvestingPro Tips available for Fresh2, offering a comprehensive view of the company's financial and market performance.

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