NewGen Announces Reverse Stock Split

Rhea-AI Summary

NewGen (NASDAQ: NIVF) announced a 1-for-20 reverse stock split of all issued and unissued shares, approved by the Board on January 21, 2025. The company's Class A Ordinary Shares will begin trading on a split-adjusted basis on February 11, 2025, under the same ticker NIVF but with a new CUSIP number G0544E204.

The reverse split will reduce outstanding Class A Ordinary Shares from approximately 27.07 million to 1.35 million. All options, warrants, and convertible securities will be adjusted accordingly. The company will issue one full post-split share for any fractional shares resulting from the process.

The primary purpose of this reverse split is to regain compliance with Nasdaq's $1.00 per share minimum bid price requirement, for which the company has until April 7, 2025, to comply. Continental Stock Transfer & Trust Company will serve as the transfer agent for this process.

Positive

• Company taking active steps to maintain Nasdaq listing compliance

Negative

• Reverse stock split indicates share price weakness
• Risk of potential delisting if minimum bid requirement isn't met by April 7, 2025
• No guarantee of compliance achievement stated in PR

Insights

Financial Analyst

NewGen's announcement of a 1-for-20 reverse stock split represents a critical turning point for the company's market presence. This corporate action, while technically maintaining proportional ownership, carries significant implications for investors and market dynamics.

The reduction from 27.07 million to 1.35 million outstanding shares is primarily aimed at regaining Nasdaq compliance before the April 7, 2025 deadline. However, historical market data suggests reverse splits often face challenging headwinds. While they can temporarily boost share price, they frequently signal underlying financial stress to investors.

Key considerations for stakeholders include:

• Reduced trading liquidity due to fewer outstanding shares, potentially leading to increased volatility
• Higher broker fees for smaller retail investors due to larger per-share trading costs
• Market perception challenges, as reverse splits are often associated with struggling companies

The proportional adjustment of options, warrants and convertible securities maintains theoretical value equality but may impact trading dynamics. While the company provides accommodation for fractional shares by rounding up, this technical aspect is overshadowed by broader market implications.

Historical precedent suggests that companies implementing reverse splits face significant hurdles in maintaining post-split price levels. Success typically depends on demonstrating fundamental business improvements concurrent with the split. For NewGen, maintaining Nasdaq listing status is important for institutional investment access and market visibility, making this a pivotal moment for the company's future market position.

NewGen’s ordinary shares to begin trading on a split-adjusted basis on February 11, 2025

BANGKOK, Jan. 31, 2025 (GLOBE NEWSWIRE) -- NewGenIvf Group Limited (NASDAQ: NIVF) (“NewGen” or the “Company”), a comprehensive fertility services provider in Asia helping couples and individuals obtain access to fertility treatments, today announced that it is implementing a reverse stock split of all of the Company's issued and unissued shares, including the Class A ordinary shares with no par value (the "Class A Ordinary Shares"), Class B ordinary shares with no par value and preferred shares with no par value, at an exchange ratio of one (1) share for twenty (20) shares (the “Reverse Stock Split”). The Reverse Stock Split was approved by the Company’s Board of Directors on January 21, 2025.

The Company’s Class A Ordinary Shares will begin trading on the Nasdaq Global Market on a post-Reverse Stock Split basis under the current ticker symbol “NIVF” at the commencement of trading on February 11, 2025, and will trade under the new CUSIP number G0544E204.

The Reverse Stock Split will reduce the number of outstanding Class A Ordinary Shares of the Company from approximately 27.07 million to approximately 1.35 million. Every twenty (20) outstanding Class A Ordinary Shares will be combined into and automatically become one post-Reverse Stock Split Class A Ordinary Share. No fractional shares will be issued in connection with the Reverse Stock Split. Instead, the Company will issue one full post-Reverse Stock Split Class A Ordinary Share to any shareholder who would have been entitled to receive a fractional share as a result of the process.

After the Reverse Stock Split, all options, warrants and other convertible securities of the Company outstanding immediately prior to the Reverse Stock Split will be adjusted by dividing the number of Class A Ordinary Shares into which the options, warrants and other convertible securities are exercisable or convertible by twenty (20) in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share.

The Company is primarily implementing the reverse stock split to enable it to regain compliance with the Nasdaq $1.00 per share minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Requirement”). Nasdaq previously provided the Company until April 7, 2025, to regain compliance. There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Requirement.

The Company’s transfer agent, Continental Stock Transfer & Trust Company (“Continental”), will serve as the transfer agent for the Reverse Stock Split.

About NewGen

NewGen is a comprehensive fertility services provider in Asia helping couples and individuals obtain access to fertility treatments. With a mission to aid couples and individuals in building families regardless of fertility challenges, NewGen has dedicated itself to creating increased access to infertility treatment and providing comprehensive fertility services for its customers. NewGen’s management team collectively has over a decade of experience in the fertility industry. NewGen’s clinics are located in Thailand, Cambodia, and Kyrgyzstan, and present a full suite of services for its patients, including comprehensive infertility and assisted reproductive technology treatments, egg and sperm donation, and surrogacy, in the appropriate jurisdictions, respectively. To learn more, visit www.newgenivf.com. The information contained on, or accessible through, NewGen’s website is not incorporated by reference into this press release, and you should not consider it a part of this press release.

Forward-Looking Statements

This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Without limiting the generality of the foregoing, the forward-looking statements in this press release include descriptions of the Company’s future commercial operations, business strategy, and financial condition. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, such as the Company’s inability to implement its business plans, identify and realize additional opportunities, the Company’s inability to meet or exceed its financial projections, or changes in the regulatory or competitive environment in which the Company operates. You should carefully consider the foregoing factors and the other risks and uncertainties described in the Company’s annual report on Form 20-F and other documents filed or to be filed by the Company with the SEC from time to time, which could cause actual events and results to differ materially from those contained in the forward-looking statements. Copies of these documents are available on the SEC’s website, www.sec.gov. All information provided herein is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law.

Investor Relations Contact

ICR, LLC
Robin Yang
Phone: +1 (212) 537-4406
Email: Newgenivf.IR@icrinc.com

FAQ

What is the exchange ratio for NIVF's reverse stock split in 2025?

NewGen's reverse stock split has an exchange ratio of 1-for-20, meaning every 20 shares will be combined into one share.

When will NIVF's reverse split shares begin trading on Nasdaq?

NIVF's shares will begin trading on a split-adjusted basis on February 11, 2025, on the Nasdaq Global Market.

How many shares will NIVF have outstanding after the reverse split?

After the reverse split, NIVF will have approximately 1.35 million Class A Ordinary Shares outstanding, reduced from 27.07 million.

What is the deadline for NIVF to meet Nasdaq's minimum bid requirement?

NIVF has until April 7, 2025, to regain compliance with Nasdaq's $1.00 per share minimum bid price requirement.

How will NIVF handle fractional shares in the reverse split?

NIVF will issue one full post-reverse split Class A Ordinary Share to any shareholder entitled to receive a fractional share.