Tantech Holdings Announces 1-for-40 Common Share Consolidation

Rhea-AI Summary

Tantech Holdings (NASDAQ: TANH) has announced a 1-for-40 share consolidation, effective February 13, 2025, aimed at regaining compliance with NASDAQ Marketplace Rule 5550(a)(2) to maintain its listing status. The consolidation will reduce outstanding common shares from 47,556,466 to approximately 1,188,911.

The company's shares will continue trading under the symbol 'TANH' but with a new CUSIP Number G8675X156. No fractional shares will be issued, and any resulting fractional shares will be redeemed by the company at the closing price on February 13, 2025. The total number of authorized shares will remain unlimited.

Positive

• Potential maintenance of NASDAQ listing through compliance efforts
• No change in authorized share limit maintains future financing flexibility

Negative

• Significant share consolidation (1-for-40) indicates severe price decline
• Risk of delisting if compliance is not achieved
• Reduction in total outstanding shares from 47.6M to 1.2M may impact liquidity

Insights

Financial Analyst

This 1-for-40 reverse stock split represents a critical but concerning development for Tantech Holdings. The drastic ratio of 1:40 signals significant underlying challenges, as reverse splits of this magnitude are relatively rare and often indicate severe price deterioration. While the action will mechanically boost the share price by 40x, historical patterns show that companies implementing such aggressive reverse splits frequently continue to face downward price pressure.

For current shareholders, while their ownership percentage remains unchanged, this consolidation presents several risks:

• Reduced liquidity due to fewer outstanding shares
• Potentially wider bid-ask spreads affecting trading costs
• Historical stigma associated with reverse splits often leading to increased selling pressure

The timing is particularly noteworthy as it comes amid broader compliance issues with Nasdaq's minimum bid requirements. While this move may temporarily resolve the listing concern, it doesn't address the fundamental challenges that led to the price decline. The reduction from 47.6 million to 1.2 million shares could significantly impact trading dynamics, potentially creating increased volatility.

The absence of any accompanying strategic initiatives or operational improvements makes this a purely technical move, which historically has rarely been sufficient to create sustainable value. Investors should closely monitor post-split trading patterns and any potential changes in institutional ownership, as these factors often influence medium-term price stability following such corporate actions.

LISHUI, China, Feb. 10, 2025 /PRNewswire/ -- Tantech Holdings Ltd (NASDAQ: TANH) ("Tantech" or the "Company"), announced today that the Company's Board of Directors approved on January 21, 2025 to effect a share consolidation of the Company's common shares at the ratio of one-for-forty with the marketplace effective date of February 13, 2025.

The objective of the share consolidation is to enable the Company to regain compliance with NASDAQ ("Nasdaq") Marketplace Rule 5550(a)(2) and maintain its listing on Nasdaq.

Beginning with the opening of trading on February 13, 2025, the Company's common shares will trade on the Nasdaq Capital Market on a split-adjusted basis, under the same symbol "TANH" but under a new CUSIP Number, G8675X156.

As a result of the share consolidation, each forty common shares outstanding will automatically combine and convert to one issued and outstanding common share without any action on the part of the shareholders. No fractional common shares will be issued to any shareholders in connection with the share consolidation, and such fractional shares will be redeemed by the Company.

The share consolidation will reduce the number of common shares issued and outstanding from 47,556,466 to approximately 1,188,911 (subject to the redemption of the fractional shares at the closing price of the common shares on February 13, 2025). The number of common shares that the Company is authorized to issue will be unlimited and remain unchanged.

About Tantech Holdings Ltd 

For the past decade, Tantech has been a highly specialized high-tech enterprise producing, researching and developing bamboo charcoal-based products with an established domestic and international sales and distribution network. Since 2017, when the Company acquired 70% of Shangchi Automobile, a vehicle manufacturer based in Zhangjiagang City, Jiangsu Province, it has manufactured and sold vehicles. The Company established two new subsidiaries, Lishui Smart New Energy Automobile Co., Ltd. and Zhejiang Shangchi New Energy Automobile Co., Ltd., in November 2020, to produce and sell street sweepers and other electric vehicles. The Company is fully ISO 90000 and ISO 14000 certified and has received a number of national, provincial and local honors, awards and certifications for its products and scientific research efforts. The Company's subsidiary, First International Commercial Factoring (Shenzhen) Co., LTD, is engaged in commercial factoring for businesses in and related to its supply chain. For more information please visit: https://tanhtech.com/. 

Forward-Looking Statements

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the sales, plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulations, and other risks contained in reports filed by the Company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by this cautionary statement and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

For more information, please contact:

Tantech Holdings Ltd
Investor Relations
Tel: +86 (578) 226-2305
ir@tantech.cn 

 

View original content:https://www.prnewswire.com/news-releases/tantech-holdings-announces-1-for-40-common-share-consolidation-302372584.html

SOURCE Tantech Holdings Ltd.

FAQ

What is the ratio of Tantech Holdings' (TANH) share consolidation announced in February 2025?

Tantech Holdings announced a 1-for-40 share consolidation, meaning every 40 common shares will be combined into 1 share.

When will TANH's share consolidation become effective?

The share consolidation will become effective on February 13, 2025, when trading begins on the Nasdaq Capital Market.

How many shares will TANH have outstanding after the February 2025 consolidation?

After the consolidation, TANH's outstanding shares will reduce from 47,556,466 to approximately 1,188,911 shares.

Why is Tantech Holdings (TANH) implementing this share consolidation?

TANH is implementing the share consolidation to regain compliance with NASDAQ Marketplace Rule 5550(a)(2) and maintain its listing on Nasdaq.

What happens to fractional shares in TANH's 2025 consolidation?

Fractional shares resulting from the consolidation will be redeemed by the company at the closing price on February 13, 2025.