Xylo Technologies Announces Plan to Implement ADS Ratio Change

Rhea-AI Summary

Xylo Technologies (Nasdaq: XYLO) has announced a planned reverse split of its American Depositary Receipt (ADR) program. The ratio change will be 1 new ADS for every 2.666666 old ADSs. Each new ADS will represent 40 ordinary shares, up from the previous 15. The effective date is set for August 5, 2024. Xylo's ADSs will continue trading on Nasdaq under the symbol 'XYLO' with a new CUSIP Number. ADS holders must surrender their old ADSs to BNY Mellon for cancellation. The change will not affect the company's ordinary shares or alter shareholders' ownership percentages, except for minor adjustments due to fractional ADSs.

Positive

• Continued listing on Nasdaq Capital Market
• Uniform treatment of all ADS holders
• No reduction in shareholders' ownership percentage (except for fractional adjustments)

Negative

• Mandatory surrender of old ADSs required
• Potential cash distribution for fractional ADSs instead of shares

Insights

Financial Analyst

Xylo Technologies' announcement of an ADS ratio change is a significant development that warrants attention from investors. This reverse split, changing from 15 to 40 ordinary shares per ADS, is likely aimed at boosting the ADS price and maintaining Nasdaq listing compliance.

Key points to consider:

• Price Impact: The 2.666666-to-1 reverse split will theoretically increase the ADS price by the same factor, potentially making it more attractive to institutional investors and reducing the risk of delisting.
• Share Count: While the total number of ADSs will decrease, individual investors' ownership percentages should remain largely unchanged, barring minor adjustments from fractional shares.
• Market Perception: Reverse splits can sometimes be viewed negatively as they're often associated with struggling companies. However, if Xylo can demonstrate strong fundamentals, this move could be seen as a strategic step towards attracting more institutional investors.
• Liquidity: There might be a short-term decrease in liquidity as the number of tradable ADSs reduces. Investors should monitor trading volumes post-split.

While this move doesn't directly affect Xylo's underlying business or financials, it's important for investors to understand the company's motives and potential market reactions. The success of this strategy will largely depend on Xylo's ability to leverage this change for improved market positioning and investor relations.

Market Research Analyst

Xylo Technologies' ADS ratio change is a strategic move that could have several implications for the company's market positioning and investor base. Let's break down the potential impacts:

• Investor Profile Shift: The higher post-split ADS price might attract more institutional investors, who often have minimum price thresholds for investments. This could lead to a more stable, long-term oriented shareholder base.
• Index Inclusion Prospects: A higher ADS price could improve Xylo's chances of inclusion in certain stock indices, potentially increasing demand for the stock and improving liquidity.
• Perception Management: While reverse splits can sometimes be viewed negatively, Xylo's diverse portfolio spanning medical solutions, internet technologies and EV charging could help mitigate concerns. The company needs to effectively communicate its growth strategy alongside this financial maneuver.
• Competitive Positioning: In the tech sector, stock price can sometimes be seen as a proxy for company health. A higher ADS price could potentially enhance Xylo's perceived standing among peers, particularly in the competitive EV and medical technology spaces.

Investors should closely monitor Xylo's communications and performance metrics in the months following the ratio change. The company's ability to capitalize on this move through improved investor relations, potential new partnerships, or enhanced market visibility will be important in determining the long-term success of this strategy.

Tel Aviv, Israel, July 30, 2024 (GLOBE NEWSWIRE) -- Xylo Technologies Ltd. (Nasdaq: XYLO) (“Xylo” and the “Company”), a technology company engaged in advanced medical solutions, innovative internet technologies and electric vehicle (“EV”) and charging solutions, announced today that it plans a ratio change which will result in a reverse split of the Company’s American Depositary Receipt, or ADR, program on the basis of one (1) new ADS for every 2.666666 old ADSs held. As a result, the number of ordinary shares of the Company represented by each American Depositary Share, or ADS, will be changed from fifteen (15) ordinary shares to forty (40) ordinary shares. The effective date anticipated for the reverse split and the ratio change is August 5, 2024 and the Company’s ADSs will continue to be traded on the Nasdaq Capital Market under the symbol “XYLO” with a new CUSIP Number 58471G 508. The ordinary shares of Xylo will not be affected by this change in the ADS to ordinary share ratio.

Effective August 5, 2024, ADS holders will be required on a mandatory basis to surrender their old ADSs to BNY Mellon for cancellation at a rate of one (1) new ADS for every 2.666666 old ADS held. The Bank of New York Mellon., as the depositary bank for Xylo’s ADS program, will arrange for the exchange of current ADSs for new ADSs (subject to receipt of applicable ADS fees from the exchanging ADS holders).

Only whole ADSs will be distributed. BNY Mellon will attempt to sell any fractional ADSs and distribute cash proceeds to ADR holders. The ratio change will affect all ADS holders uniformly, will not reduce any ADS holder’s ownership percentage in the Company except for minor adjustments that may result from the treatment of fractional ADSs and will not result in any change to the Company’s share capital.

About Xylo

Based in Israel, Xylo Technologies Ltd. (Nasdaq: XYLO) is a technologies company that is focused on innovative growth partnerships, mainly in advanced medical solutions, digital commerce, and electric vehicle markets. Xylo’ affiliations in the medical solutions arena include the ownership in Polyrizon Ltd. The Company’s affiliates in digital commerce include Gix Internet Ltd., and Eventer Technologies Ltd. In the electric vehicle market, Charging Robotics, Inc. and Revoltz Ltd. are also part of the Company’s portfolio of technology solution providers. Other affiliations of the Company include Parazero Technologies Ltd., Zig Miami 54 LLC.

Xylo is traded on The Nasdaq Capital Market. To learn more about Xylo’s advanced technologies, please visit http://www.medigus.com/investor-relations.
  

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and other Federal securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. Because such statements deal with future events and are based on Xylo’s current expectations, they are subject to various risks and uncertainties, and actual results, performance or achievements of Xylo could differ materially from those described in or implied by the statements in this press release.

The forward-looking statements contained or implied in this press release are subject to other risks and uncertainties, including those discussed in any filings with the SEC. Except as otherwise required by law, Xylo undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release. Xylo is not responsible for the contents of third-party websites.

Company Contact:

Tali Dinar
Chief Financial Officer
ir@xylotech.ai

Investor Relations Contact:
Michal Efraty
Investor Relations
michal@efraty.com 

FAQ

What is the new ADS to ordinary share ratio for Xylo Technologies (XYLO)?

The new ratio will be 1 ADS representing 40 ordinary shares of Xylo Technologies, effective August 5, 2024.

When will the Xylo Technologies (XYLO) ADS reverse split take effect?

The reverse split for Xylo Technologies' ADSs is scheduled to take effect on August 5, 2024.

Will Xylo Technologies (XYLO) change its Nasdaq trading symbol after the ADS ratio change?

No, Xylo Technologies will continue to trade on the Nasdaq Capital Market under the symbol 'XYLO' after the ADS ratio change.

How will fractional ADSs be handled in Xylo Technologies' (XYLO) reverse split?

BNY Mellon will attempt to sell any fractional ADSs resulting from the reverse split and distribute cash proceeds to ADS holders.