J-Long Group Limited Announces Effective Time of Share Consolidation/Reverse Stock Split to Regain NASDAQ Compliance

Rhea-AI Summary

J-Long Group (Nasdaq: JL) announced a 1-for-10 reverse stock split effective December 9, 2024, at 11:59 pm to regain compliance with Nasdaq's minimum $1.00 bid price requirement. Trading on the adjusted basis will begin December 10, 2024, under the same ticker 'JL'.

The company's total authorized Ordinary Shares will be reduced from 30,000,000 to 3,000,000, with a new par value of $0.000375 per share. No fractional shares will be issued, and holdings will be rounded down to the nearest whole share. The split will proportionally adjust outstanding stock options, warrants, and equity awards.

Positive

• Attempt to regain Nasdaq compliance through reverse stock split
• No action required from shareholders holding shares electronically

Negative

• Implementation of 1-for-10 reverse stock split indicating share price weakness
• Reduction in total authorized shares from 30M to 3M
• Risk of continued non-compliance with Nasdaq requirements despite reverse split

Insights

Financial Analyst

This reverse stock split is a critical move for J-Long Group to maintain its Nasdaq listing, though it's primarily a technical adjustment rather than a fundamental change. The 1:10 ratio will mechanically boost the share price by combining every 10 shares into one, while proportionally reducing the total share count from 30M to 3M authorized shares. The timing is strategic, with trading on split-adjusted basis beginning December 10, 2024. This corporate action doesn't change the company's market capitalization or underlying business value, but failure to meet Nasdaq's minimum bid requirement could result in delisting. While reverse splits often carry negative market perception as they're typically implemented by struggling companies, successful compliance with Nasdaq requirements could help maintain institutional investor access and market liquidity.

Legal Expert

The reverse stock split has been properly executed from a corporate governance perspective, with stockholder approval secured at the November 18 special meeting. Key legal considerations have been addressed, including the treatment of fractional shares (rounded down), proportional adjustments to outstanding options and warrants and the formal amendment to the Memorandum and Articles of Association. The new CUSIP number (G5191U112) and adjusted par value ($0.000375) reflect proper documentation and regulatory compliance. The company has also clearly outlined the process for both registered and street name shareholders, with VStock Transfer, serving as the exchange agent, minimizing potential legal complications in the share exchange process.

Hong Kong, Dec. 05, 2024 (GLOBE NEWSWIRE) -- J-Long Group Limited (Nasdaq: JL), a Hong Kong-based and established distributor of reflective and non-reflective garment trims including, among others, heat transfers, fabrics, woven labels and tapes, sewing badges, piping, zipper pulls and drawcords, today announced today that it will effect a share consolidation ("Reverse Stock Split") of its Ordinary Shares at a ratio of 1-for-10, effective as of 11:59 pm on December 9, 2024 (the "Effective Time"), in order to regain compliance with the minimum $1.00 bid price per share requirement of Nasdaq's Marketplace Rules 5550(a)(2) and Rule 5450(a)(1). The Company's Ordinary Shares are expected to begin trading on a Reverse Stock Split adjusted basis on Nasdaq as of the open of trading on December 10, 2024, under the existing ticker symbol "JL."

The Company's members (Stockholders) previously approved the reverse stock split and granted the Company's board of directors the authority to determine the final reverse stock split ratio and when to proceed with the reverse stock split at a Special Meeting of Stockholders held on November 18, 2024. The Company will file an Amendment to its Memorandum and Articles of Association to effect the share consolidation/reverse stock split at the ratio of 1-for-10 as of the Effective Time.

The CUSIP number for the Company’s Ordinary Shares will be G5191U112.

As of the Effective Time, every 10 shares of the Company's issued and outstanding Ordinary Shares will be combined into one issued and outstanding Ordinary Share. The total number of authorized Ordinary Shares will be reduced from 30,000,000 to 3,000,000, and the par value will change to $0.000375 per share. No fractional Ordinary Shares will be issued in connection with the Reverse Stock Split, and any Shareholders of record who otherwise would be entitled to receive a fraction of a share because they hold a number of pre-split ordinary shares not evenly divisible by the number of pre-split ordinary shares for which each post-split ordinary share is to be exchanged shall be entitled to receive such number of ordinary shares as rounded down to the nearest whole share.

As of the Effective Time, proportional adjustments will also be made to the number of Ordinary Shares issuable upon the exercise of any outstanding stock options or warrants, and the exercise prices and stock price targets of any outstanding stock options, warrants, and equity awards will also be proportionately adjusted, as applicable.

The Company's transfer agent, VStock Transfer, LLC, will serve as the exchange agent for the Reverse Stock Split. Registered stockholders holding pre-Reverse Stock Ordinary Shares of the Company's electronically in book-entry form are not required to take any action to receive post- reverse-split shares. Those stockholders who hold their shares in brokerage accounts or in "street name" will have their positions automatically adjusted to reflect the Reverse Stock Split, subject to each brokers' particular processes, and will not be required to take any action in connection with the Reverse Stock Split.

Disclaimer: Forward-looking statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements generally relate to future events, such as the expected timing of the reverse stock split, the impact of the reverse stock split on the Company’s share price, and the Company’s ability to meet the minimum per share bid price requirement for continued listing on the Nasdaq Stock Market. You are cautioned that such statements are not guarantees of future performance and that JL’s actual results may differ materially from those set forth in the forward-looking statements. All of these forward-looking statements are subject to risks and uncertainties that may change at any time. Factors that could cause JL’s actual expectations to differ materially from these forward-looking statements include JL’s ability to continue to comply with applicable listing standards of the Nasdaq Stock Market and the other factors under the heading “Risk Factors” set forth in JL’s Annual Report on Form 20-F, and other filings made with SEC. Such filings are available on our website or at www.sec.gov. You should not place undue reliance on these forward-looking statements, which are made only as of the date of this press release. JL undertakes no obligation to publicly update or revise forward-looking statements to reflect subsequent developments, events, or circumstances, except as may be required under applicable securities laws.

Hong Kong:

J-Long Group Limited
Edwin Chun Yin Wong, CEO and Director
ir@j-long.com +852 3693 2110

FAQ

When will J-Long Group (JL) implement its reverse stock split?

J-Long Group will implement its 1-for-10 reverse stock split effective December 9, 2024, at 11:59 pm.

What is the new CUSIP number for J-Long Group (JL) after the reverse split?

The new CUSIP number for J-Long Group's Ordinary Shares will be G5191U112.

Why is J-Long Group (JL) conducting a reverse stock split?

J-Long Group is conducting the reverse stock split to regain compliance with Nasdaq's minimum $1.00 bid price requirement.

How will J-Long Group's (JL) authorized shares change after the reverse split?

J-Long Group's authorized Ordinary Shares will be reduced from 30,000,000 to 3,000,000 shares.