Luokung Announces 8-to-1 Share Combination

Rhea-AI Summary

Luokung Technology Corp. (NASDAQ: LKCO) has announced an 8-to-1 share combination effective September 17, 2024. Key points include:

- Trading will begin on a split-adjusted basis on the Nasdaq Capital Market under the same symbol 'LKCO'
- New CUSIP number: G56981 114
- Every 8 shares will be combined into one share
- Fractional shares will be rounded up to the next whole number
- Par value per share will be $0.0001
- Total authorized ordinary shares remain at 1 billion
- No shareholder approval required
- Company to file amended M&A with British Virgin Islands Registry of Corporate Affairs

The share combination aims to uniformly affect all shareholders without altering percentage interests, except for fractional share adjustments.

Positive

• Share combination may help maintain Nasdaq listing compliance
• Rounding up of fractional shares benefits shareholders
• No change in total authorized shares maintains future flexibility

Negative

• Potential short-term stock price volatility due to share combination
• Possible reduction in liquidity for smaller shareholders
• No fundamental change in company value or market capitalization

Insights

Financial Analyst

Luokung's 8-to-1 share combination is a strategic move to address potential Nasdaq compliance issues. This action typically aims to boost the stock price above the $1 minimum bid requirement, reducing the risk of delisting. However, it's important to note that this doesn't change the company's underlying value or market capitalization.

Investors should be aware that while the share price will mathematically increase, this doesn't represent actual value creation. The move might temporarily improve investor perception, but long-term performance depends on Luokung's fundamental business operations and financial health. The rounding up of fractional shares could slightly benefit some shareholders, but the overall impact is minimal.

This action suggests Luokung may be struggling to maintain its Nasdaq listing naturally, which could be a red flag for investors. It's essential to scrutinize the company's financial reports and growth prospects before making investment decisions based solely on this share combination.

Market Research Analyst

Luokung's share combination reflects broader trends in the spatial-temporal big data and LBS industries. The company's focus on smart transportation, natural resource management and LBS applications aligns with growing market demands. However, the need for this corporate action suggests potential challenges in attracting investor interest or maintaining market valuation.

The impact on Luokung's market position is nuanced. While it may temporarily boost the stock price, it doesn't address underlying business performance issues. Competitors in the spatial-temporal data space might view this as an opportunity to gain market share. Investors should closely monitor how this move affects Luokung's ability to secure funding, attract partnerships and compete effectively in its target markets.

The success of this strategy will largely depend on Luokung's ability to leverage its technology in high-growth areas like autonomous driving and smart cities, translating potential into tangible financial results and sustainable growth.

BEIJING, Sept. 12, 2024 (GLOBE NEWSWIRE) -- Luokung Technology Corp. (NASDAQ: LKCO) (“Luokung,” “we,” “our” or the “Company”), a British Virgin Islands company, reported that it expects to implement a 8-to-1 share combination on its ordinary shares effective Tuesday, September 17, 2024, with trading to begin on a split-adjusted basis at the market open on that day. Trading in the ordinary shares will continue on the Nasdaq Capital Market under the symbol “LKCO”. The new CUSIP number for the ordinary shares following the share combination is G56981 114.

Upon the effectiveness of the share combination, every 8 shares of the Company’s issued and outstanding ordinary shares will automatically be combined into one issued and outstanding ordinary share. No fractional shares will be issued as a result of the share combination. Instead, any fractional shares that would have resulted from the split will be rounded up to the next whole number. The share combination affects all shareholders uniformly and will not alter any shareholder’s percentage interest in the Company’s outstanding ordinary shares, except for adjustments that may result from the treatment of fractional shares. The par value per share after the share combination will be $0.0001 while the total authorized ordinary shares of the Company will remain at 1 billion shares, as per the separate resolutions approved by the Company’s board of directors at the same time.

The share combination at a ratio of 8-to-1 shares was approved by the Company’s board of directors. No approval from its members is required pursuant to the Company’s Amended and Restated Memorandum and Articles of Association (the “M&A”). The Company is to file a further restated and amended M&A with the British Virgin Islands Registry of Corporate Affairs to reflect the share combination.

About Luokung Technology Corp.

Luokung Technology Corp. is a leading spatial-temporal intelligent big data services company, as well as a leading provider of LBS for various industries in China. Backed by its proprietary technologies and expertise in multi-sourced intelligent spatial-temporal big data, Luokung has established city-level and industry-level holographic spatial-temporal digital twin systems and actively serves industries including smart transportation (autonomous driving, smart highway and vehicle-road collaboration), natural resource asset management (carbon neutral and environmental protection remote sensing data service), and LBS smart industry applications (mobile Internet LBS, smart travel, smart logistics, new infrastructure, smart cities, emergency rescue, among others). The Company routinely provides important updates on its website: https://www.luokung.com.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This press release contains certain forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future and other statements that are other than statements of historical fact. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “might”, “plan”, “probable”, “potential”, “should”, “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination and analysis of the existing law, rules and regulations and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you the statement herein will be accurate. As a result, you are cautioned not to rely on any forward-looking statements.

CONTACT:
The Company:
Mr. Jian Zhang
Chief Financial Officer
Tel: +86-10-6506-5217
Email: ir@luokung.com

FAQ

When will Luokung's (LKCO) 8-to-1 share combination take effect?

Luokung's 8-to-1 share combination will take effect on Tuesday, September 17, 2024, with trading to begin on a split-adjusted basis at the market open on that day.

What happens to fractional shares in Luokung's (LKCO) share combination?

Any fractional shares that would have resulted from the 8-to-1 share combination will be rounded up to the next whole number.

Will Luokung's (LKCO) stock symbol change after the share combination?

No, Luokung's stock will continue to trade on the Nasdaq Capital Market under the symbol 'LKCO' after the share combination.

What is the new CUSIP number for Luokung (LKCO) shares after the combination?

The new CUSIP number for Luokung's ordinary shares following the 8-to-1 share combination is G56981 114.