noco-noco Inc Announces Revised Timelines for Reverse Stock Split

Rhea-AI Summary

noco-noco Inc announces a delay in implementing its previously approved reverse stock split, originally set for November 1, 2024. The delay occurred due to timing issues with required filings and the issuance of consideration shares to noco-tech. The company will seek shareholder ratification for a revised effective date at an upcoming EGM on December 13, 2024, with the reverse split expected to be implemented around December 20, 2024.

To comply with Nasdaq's $2.5 million minimum stockholders' equity requirement, noco-noco closed the acquisition of separator production facilities from noco-tech for approximately $9 million, issuing 90,433,183 restricted ordinary shares at $0.10 per share. This transaction has improved the company's shareholder equity position from a $7.3 million deficit to a positive $1.7 million.

Positive

• Acquisition of separator production facilities for $9 million improves shareholder equity from -$7.3 million to +$1.7 million
• Shareholders approved share consolidation (reverse stock split) to comply with Nasdaq's minimum bid price requirement
• Company remains committed to regaining compliance with Nasdaq's listing standards

Negative

• Delay in implementing the approved reverse stock split, potentially risking Nasdaq compliance
• Need for additional shareholder approval at upcoming EGM due to missed implementation deadline
• Issuance of 90,433,183 new shares may lead to dilution of existing shareholders' stakes

Insights

Financial Analyst

This news is significant for noco-noco Inc. (NCNC) investors, as it addresses critical compliance issues with Nasdaq listing requirements. The delay in implementing the reverse stock split could potentially impact the company's ability to meet the minimum bid price requirement, which is important for maintaining its Nasdaq listing. However, the company has taken proactive steps to address this, including seeking an extension and planning a new EGM for shareholder ratification.

The acquisition of separator production facilities for $9 million through a share issuance is a strategic move that has substantially improved the company's financial position. It has transformed a $7.3 million shareholder equity deficit into a positive $1.7 million position, which is important for meeting Nasdaq's $2.5 million minimum stockholders' equity requirement.

While the delay in the reverse stock split is concerning, the company's efforts to improve its financial standing and maintain Nasdaq compliance are positive signs. Investors should closely monitor the upcoming EGM and the implementation of the reverse stock split, as these events will be critical for NCNC's future on the Nasdaq exchange.

Legal Expert

The procedural misstep in implementing the reverse stock split highlights the complexities of corporate governance and regulatory compliance. noco-noco Inc.'s failure to submit the Company Event Notification Form to Nasdaq within the required timeframe is a significant oversight that has led to this delay. This situation underscores the importance of meticulous planning and execution when dealing with critical corporate actions and regulatory requirements.

The company's approach to rectifying the situation through an additional EGM for shareholder ratification is appropriate and necessary under Cayman Islands law. This demonstrates a commitment to proper legal procedures and shareholder rights. However, the delay could potentially expose the company to regulatory scrutiny and may impact investor confidence.

The issuance of consideration shares to noco-tech as part of the asset acquisition is a material transaction that requires careful legal structuring. While it has improved the company's financial position, it's important that all aspects of this transaction, including the share issuance, comply with relevant securities laws and Nasdaq regulations to avoid further compliance issues.

Singapore, Oct. 22, 2024 (GLOBE NEWSWIRE) --  noco-noco Inc. (the “Company”) announces that it has sought an extension to effect its reverse stock split in order to comply with Nasdaq’s minimum bid price requirement, following a delay that prevented the reverse split from taking place, by the previously set deadline of November 1, 2024.

At the Extraordinary General Meeting (“EGM”) held on October 17, 2024, the Company’s shareholders approved a share consolidation (reverse stock split) and the adoption of an Amended Memorandum & Articles of Association (“MAA”), both intended to take effect immediately. However, due to the timing of the required filings, the reverse split was delayed. Specifically, the Company did not submit the Company Event Notification Form to Nasdaq five business days prior to the planned effective date. This delay arose because of the issuance of consideration shares to noco-tech, a wholly-owned subsidiary of 3DOM Alliance Inc., as part of the Company's broader compliance strategy regarding the shareholders' equity requirement. The transfer agent required more time than expected to process these updates to the shareholder register.

Due to this delay, the Company will need to postpone the effective date of the share consolidation. Under Cayman Islands law, changes such as share consolidation and amendments to the MAA require shareholder approval. As the Company was unable to implement the share consolidation on the previously approved date, it will seek shareholder ratification for the revised effective date at an upcoming EGM, anticipated on December 13, 2024, with the reverse stock split expected to be implemented approximately December 20, 2024.

In connection with its actions to comply with the $2.5 million minimum stockholders’ equity requirement in accordance with the Panel’s decision dated August 25, 2024, the Company closed the acquisition of separator production facilities from noco-tech Inc. for approximately $9 million, via a new issuance of 90,433,183 restricted ordinary shares of the Company at a reference price of $0.10 per share, with such shares to be issued as full and final consideration for the assets. The successful transaction closing has significantly improved the shareholder equity deficit position of $7.3 million as of June 30, 2024 (unaudited) to a positive position of $1.7 million.

The Company remains committed to regaining compliance with Nasdaq’s listing standards and will continue to update shareholders on further developments.

About noco-noco:
noco-noco Inc. (Nasdaq NCNC) is a technology solutions provider working to accelerate the global transformation to a decarbonized economy. Building its business on X-SEPA™ — the revolutionary battery separator technology developed in Japan and designed for long-lasting and high heat-resistant performance— noco-noco addresses the need for clean, affordable, and sustainable energy storage solutions.

Read more about noco-noco:
https://noco-noco.com/ 

Safe Harbor Statement: 
This press release contains forward-looking statements within the meaning of section 27A of the U.S. Securities Act of 1933, as amended (the “Securities Act”), and section 21E of the U.S. Securities Exchange Act of 1934 (“Exchange Act”) that are based on beliefs and assumptions and information currently available to noco-noco. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “target,” “seek” or the negative or plural of these words, or other similar expressions that are predictions or indicate future events or prospects, although not all forward-looking statements contain these words. Any statements that refer to expectations, projections, or other characterizations of future events or circumstances, the markets in which noco-noco operates as well as any information concerning possible or assumed future results of operations of noco-noco, are also forward-looking statements. These statements involve risks, uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from those expressed or implied by these forward-looking statements. Although noco-noco believes that it has a reasonable basis for each forward-looking statement contained in this communication, noco-noco cautions you that these statements are based on a combination of facts and factors currently known and projections of the future, which are inherently uncertain. noco-noco cannot assure you that the forward-looking statements in this communication will prove to be accurate. These forward-looking statements are subject to a number of risks and uncertainties, including, among others, the impact of the global pandemic like COVID-19, the outcome of any potential litigation, government or regulatory proceedings, and other risks and uncertainties. There may be additional risks that noco-noco presently does not know or that noco-noco currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by noco-noco and its respective directors, officers or employees or any other person that noco-noco will achieve their objectives and plans in any specified time frame, or at all. The forward-looking statements in this press release represent the views of noco-noco as of the date of this communication. Subsequent events and developments may cause those views to change. However, while noco-noco may update these forward-looking statements in the future, there is no current intention to do so, except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing the views of noco-noco as of any date subsequent to the date of this communication.

FAQ

When is noco-noco Inc (NCNC) expected to implement its reverse stock split?

noco-noco Inc (NCNC) is expected to implement its reverse stock split around December 20, 2024, subject to shareholder ratification at an EGM planned for December 13, 2024.

What caused the delay in noco-noco Inc's (NCNC) reverse stock split implementation?

The delay was caused by timing issues with required filings and the issuance of consideration shares to noco-tech, which required more time for the transfer agent to process updates to the shareholder register.

How has noco-noco Inc (NCNC) improved its shareholder equity position?

noco-noco Inc (NCNC) improved its shareholder equity position by acquiring separator production facilities for $9 million, changing from a $7.3 million deficit to a positive $1.7 million position.

How many new shares did noco-noco Inc (NCNC) issue for the acquisition of separator production facilities?

noco-noco Inc (NCNC) issued 90,433,183 restricted ordinary shares at $0.10 per share as consideration for the acquisition of separator production facilities from noco-tech Inc.