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HONG KONG - J-Long Group Limited (NASDAQ:JL), a distributor of garment trims, has announced a reverse stock split of its Ordinary Shares at a ratio of 1-for-10, set to take effect at the close of business on December 3, 2024. This move is aimed at regaining compliance with Nasdaq's minimum bid price requirement.
The company's shares are expected to commence trading on a split-adjusted basis from the opening of trading on December 4, 2024, under the existing ticker symbol "JL." This decision follows approval from J-Long Group's stockholders at a Special Meeting held on November 18, 2024, where the board of directors was granted the authority to finalize the reverse stock split ratio and timing.
In line with the reverse split, the total number of authorized Ordinary Shares will decrease from 30 million to 3 million, and the par value will be adjusted to $0.000375 per share. Shareholders will not receive fractional shares if their holdings are not divisible by ten; instead, their share count will be rounded down to the nearest whole number.
Proportional adjustments will also be made to the terms of outstanding stock options, warrants, and equity awards. VStock Transfer, LLC will act as the exchange agent for the reverse split. Shareholders with book-entry shares or those holding shares through a brokerage account will not need to take any action, as the changes will be automatically reflected in their accounts.
The reverse stock split is part of J-Long Group's efforts to increase the marketability and liquidity of its shares and to maintain its listing on the Nasdaq. The company's forward-looking statements indicate that there is no guarantee that these goals will be achieved, and these statements are subject to various risks and uncertainties. This information is based on a press release statement.
In other recent news, J-Long Group Limited, a distributor of garment trims, has been notified by the Nasdaq Stock Market LLC of a non-compliance issue. The company currently does not meet the minimum market value requirement for continued listing on the Nasdaq Global Market. This issue arose as the market value of publicly held shares (MVPHS) of J-Long Group fell below the required minimum of US$5,000,000 for 30 consecutive business days. To regain compliance, J-Long Group must increase its MVPHS to at least $5,000,000 for a minimum of 10 consecutive business days within a 180-day grace period, which ends on March 3, 2025. If the company fails to do so, its shares may face delisting, although it has the option to appeal any delisting decision or consider transferring its securities to the Nasdaq Capital Market. Despite this notice, J-Long Group's business operations remain unaffected and the company plans to closely monitor its MVPHS and explore options to regain compliance within the allotted timeframe. These are recent developments that investors should be aware of.
InvestingPro Insights
J-Long Group's decision to implement a reverse stock split comes at a critical time for the company, as reflected in recent financial data and market performance. According to InvestingPro data, J-Long's stock has experienced significant declines, with a one-week price total return of -24.12% and a one-year price total return of -95.86% as of the most recent data. These figures underscore the urgency of the company's efforts to boost its share price and maintain Nasdaq compliance.
Despite these challenges, J-Long Group maintains some financial strengths. An InvestingPro Tip indicates that the company holds more cash than debt on its balance sheet, which could provide some financial flexibility as it navigates this transition. Additionally, with a Price to Book ratio of 0.91, the stock may be considered undervalued by some investors.
However, it's important to note that J-Long is facing operational headwinds. The company's revenue for the last twelve months stood at $28.38 million, with a concerning revenue growth rate of -25.89%. This decline in revenue, coupled with an InvestingPro Tip highlighting that the company is quickly burning through cash, suggests that J-Long may face challenges beyond just its stock price.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for J-Long Group, providing a deeper understanding of the company's financial health and market position.
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