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BEIJING - ReTo Eco-Solutions , Inc. (NASDAQ:RETO), a Chinese manufacturer specializing in eco-friendly construction materials, has announced a share consolidation strategy set to take effect next Monday. The company’s board of directors has approved a ten-to-one combination of its Class A shares, which will commence trading on a post-combination basis on the Nasdaq Capital Market under the existing ticker "RETO". The announcement comes as the company’s stock has declined nearly 70% over the past year, according to InvestingPro data, with shares currently trading at $0.88.
This restructuring will see every ten pre-combination Class A shares converted into a single Class A share, effectively reducing the total number of issued and outstanding Class A shares from approximately 19.35 million to 1.94 million. The par value per share will adjust from $0.1 to $1.0. The consolidation aims to elevate the market price per share, a strategic move to help the company maintain its Nasdaq listing. With a current market capitalization of just $17.47 million and significant financial challenges ahead (discover 12 more key insights with InvestingPro), the company faces an uphill battle.
Shareholders will not receive fractional shares in the process. Instead, those holding a number of shares not divisible by ten will be granted an additional share to avoid fractions. The share combination will proceed without a shareholder vote, as it is not a requirement under the laws of the British Virgin Islands where the company is incorporated.
The company’s transfer agent, VStock Transfer, LLC, will oversee the exchange process. Shareholders with physical stock certificates will need to surrender them to VStock Transfer, LLC for adjustment.
ReTo Eco-Solutions has been operational since 1999, providing a range of services including the manufacture and sale of ecological environment protection equipment and intelligent equipment, as well as offering consultation, design, implementation, and installation services related to these products. InvestingPro data reveals concerning trends, including a 20% revenue decline and negative EBITDA of $4.34 million in the last twelve months, with an overall Financial Health Score rated as "WEAK".
The company also highlighted that the forward-looking statements in their announcement carry risks and uncertainties, and there is no guarantee that ReTo will successfully regain compliance and maintain its Nasdaq listing. The company’s current valuation appears stretched according to InvestingPro’s Fair Value analysis, adding another layer of uncertainty to its market position.
This news is based on a press release statement from ReTo Eco-Solutions, Inc.
In other recent news, ReTo Eco-Solutions, Inc. is facing a delisting challenge from the Nasdaq Stock Market due to its failure to meet the minimum bid price requirement for its Class A shares. The company was informed that its shares did not maintain the necessary $1 minimum closing bid price over the previous 30 business days. As a result, ReTo’s shares are set for removal from the Nasdaq at the start of business on February 7, 2025, though the company plans to request a hearing to delay the process. In a separate development, ReTo Eco-Solutions has secured a $2 million contract with a client in the United Arab Emirates through its subsidiary, Beijing REIT Equipment Technology Co., Ltd. The contract involves the sale of the RT18A, a fully automatic concrete block machine designed to enhance performance and user experience. The company has expressed confidence in its growing cooperation with Middle Eastern clients and its commitment to creating value through superior products and services. These developments come amid ongoing challenges and opportunities for ReTo Eco-Solutions in its business operations.
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