UTime Limited Announces 1-For-10 Reverse Share Split

Rhea-AI Summary

UTime (Nasdaq: WTO) has announced a 1-for-10 reverse share split of its Class A ordinary shares, effective March 31, 2025. The move aims to regain compliance with Nasdaq's minimum bid price requirement of $1.00 per share.

Key details of the reverse split include:

• Outstanding shares will reduce from approximately 36 million to 3.6 million
• New par value will be $0.001 per share
• Trading continues under symbol 'WTO' with new CUSIP number G9411M124
• Fractional shares will be rounded up to the nearest whole number

The split will also affect ordinary shares issuable under outstanding derivative securities and equity incentive plans. VStock Transfer, will serve as the exchange agent, with shareholders holding book-entry or brokerage accounts requiring no action.

Positive

• Potential to maintain Nasdaq listing by meeting minimum bid price requirement
• Shareholders automatically receive rounded-up shares for fractional interests

Negative

• Indicates company's struggle to maintain required share price
• No fundamental change in company value despite share consolidation
• Risk of continued price decline post-split

Insights

Financial Analyst

UTime 's announcement of a 1-for-10 reverse share split carries significant implications for investors. This corporate action will mathematically increase the company's share price by consolidating every 10 shares into 1, reducing the total outstanding share count from 36 million to 3.6 million shares. The company explicitly states this move is intended to regain compliance with Nasdaq's minimum bid price requirement of $1.00 - a clear indication that UTime's shares have been trading below this threshold.

Reverse splits are technical adjustments that don't inherently change a company's fundamental value or market capitalization. However, they typically signal underlying challenges that have driven the share price down to problematic levels. The necessity of taking this action to maintain Nasdaq listing requirements is particularly telling.

For existing shareholders, while the mathematical value of holdings remains theoretically unchanged (10 shares at a lower price converts to 1 share at a proportionally higher price), historical market patterns show that companies implementing reverse splits often face continued selling pressure afterward. The market frequently interprets these actions as confirmations of weakness rather than solutions to fundamental problems.

The announcement notably lacks any accompanying strategic initiatives, operational improvements, or positive business developments that might offset the negative connotations of a reverse split. This suggests the action is purely defensive to maintain listing status rather than part of a broader positive transformation strategy. The timing and ratio indicate significant downward pressure on the stock that requires substantial mathematical adjustment to meet minimum price standards.

NEW YORK, March 26, 2025 (GLOBE NEWSWIRE) -- UTime Limited (“UTime” or the “Company”) (Nasdaq: WTO), a mobile device manufacturing company committed to providing cost effective products and solutions to consumers globally and helping low-income individuals from established and emerging markets today announced that it will effect a reverse share split of its outstanding Class A ordinary shares, par value $0.0001 per share (the “Ordinary Shares”), at a ratio of 1-for-10, to be effective on or around the open of trading on March 31, 2025.

Our Ordinary Shares will begin trading on a reverse share split-adjusted basis at the opening of The Nasdaq Capital Market (“Nasdaq”) on or around Monday, March 31, 2025. Following the reverse share split, the Ordinary Shares will have a new par value of $0.001 per share and will continue to trade on Nasdaq under the symbol “WTO” with the new CUSIP number, G9411M124. The reverse share split is intended for the Company to regain compliance with the minimum bid price requirement of $1.00 per Ordinary Share for continued listing on Nasdaq.

No fractional shares will be issued in connection with the reverse share split and all such fractional interests will be rounded up to the nearest whole number of Ordinary Shares. In addition, the reverse share split will apply to the Ordinary Shares issuable upon the exercise of the Company’s outstanding derivative securities, with proportionate adjustments to be made to the exercise prices and number of derivates thereof and under the Company’s equity incentive plans.

The reverse share split will reduce the number of issued and outstanding shares of the Company’s Ordinary Shares from approximately 36 million to approximately 3.6 million.

On March 12, 2025, the shareholders of the Company approved the reverse share split of the Ordinary Shares, at a ratio of 1-for-10.

VStock Transfer, LLC is acting as the exchange agent and paying agent for the reverse share split. Shareholders holding their shares in book-entry form or in brokerage accounts need not take any action in connection with the reverse share split.

VStock Transfer, LLC will provide instructions to any shareholders with certificates regarding the process in connection with the exchange of pre-reverse share split share certificates for ownership in book-entry form or share certificates on a post-reverse share split basis. Shareholders are encouraged to contact their bank, broker or custodian with any procedural questions.

About UTime

UTime Ltd., established in 2008, is committed to providing cost-effective mobile devices to consumers globally and to helping low-income individuals from established markets, including the United States and emerging markets such as India and other countries in South Asia and Africa have better access to updated mobile technology. Since July 2023, we have added smart electric vehicle chargers into our product lines in response to the global demand for energy conservation and carbon reduction. For more information, visit the Company’s website at http://www.utimeworld.com/.

Forward-Looking Statements

Statements in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements relating to the ability of the Company to regain compliance with Nasdaq continued listing requirements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors discussed in the “Risk Factors” section of the Annual Report in Form 20-F filed with the SEC on July 30, 2024. Any forward-looking statements contained in this press release speak only as of the date hereof, and the Company specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

For more information, please contact:

PR

Email: pr@utimeworld.com

FAQ

When will UTime (UTME) implement its 1-for-10 reverse stock split?

UTime's reverse stock split will be effective on March 31, 2025, when trading begins on the Nasdaq Capital Market.

How many shares will UTime (UTME) have outstanding after the reverse split?

After the 1-for-10 reverse split, UTime's outstanding shares will reduce from approximately 36 million to 3.6 million shares.

What happens to fractional shares in UTime's (UTME) reverse split?

All fractional shares resulting from the reverse split will be rounded up to the nearest whole number of ordinary shares.

Why is UTime (UTME) conducting a reverse stock split?

UTime is implementing the reverse split to regain compliance with Nasdaq's minimum bid price requirement of $1.00 per share for continued listing.