UTStarcom Announces Results of Extraordinary Meeting of Shareholders and Effectiveness of One-for-Four Reverse Share Split

Rhea-AI Summary

UTStarcom (NASDAQ: UTSI) held its extraordinary shareholders' meeting on June 28, 2022, where key resolutions were approved. A one-for-four reverse stock split was authorized, consolidating 250 million shares into 62.5 million shares with an increased par value. This aims to comply with NASDAQ’s minimum bid price requirement of $1.00 within 180 days. The meeting also included the adoption of a revised Memorandum and Articles of Association.

Positive

• Approval of a one-for-four reverse stock split to enhance stock price.
• Adoption of a new Memorandum and Articles of Association, potentially aligning with strategic goals.

Negative

• The company is under NASDAQ review for not meeting minimum bid price requirements, which could impact investor confidence.

HANGZHOU, China, June 28, 2022 (GLOBE NEWSWIRE) -- UTStarcom (“UT” or the “Company”) (NASDAQ: UTSI), a global telecommunications infrastructure provider, today announced the official results of its extraordinary meeting of shareholders, held on June 28, 2022 at 10:00 a.m. China Standard Time in Hangzhou, China. Shareholders cast their votes as described below:

1. Shareholders approved, effective on June 28, 2022, as of 4:30 p.m. 2022, Eastern Time, as an ordinary resolution, in accordance with Article 49 of the Company's Second Amended and Restated Memorandum and Articles of Association, that the authorized share capital of the Company be amended by the consolidation of the existing 250,000,000 Ordinary Shares of US$0.00375 par value each into 62,500,000 Ordinary Shares of US$0.015 par value each, such that:
   
   
   (i) the authorized share capital of the Company is amended to US$943,750 divided into 62,500,000 Ordinary Shares of a par value of US$0.015 each and 5,000,000 Preference Shares of a par value of US$0.00125 each;
   
   
   (ii) each existing issued 4 Ordinary Shares of US$0.00375 par value each be consolidated into 1 Ordinary Share of US$0.015 par value each and the register of members of the Company be updated accordingly; and
   
   
   (iii) any fractions of a share that result from the consolidation described above be automatically repurchased by the Company at the Market Price (as defined in the Company's Second Amended and Restated Articles of Association) of such fractions on the date of this Extraordinary Meeting.
   
   
   
2. Shareholders approved, effective on June 28, 2022, as of 4:30 p.m. Eastern Time, as a special resolution, that the Second Amended and Restated Memorandum and Articles of Association of the Company currently in effect be amended and restated by their deletion in their entirety and the substitution in their place of the Third Amended and Restated Memorandum and Articles of Association.
   
   

On January 27, 2022, the Company received formal notice dated January 24, 2022 from NASDAQ stating that the Company was not in compliance with NASDAQ’s Listing Rules of minimum bid price. The Company has 180 days to regain compliance with the listing standards. To regain compliance, the closing bid price of the Company’s Ordinary Shares must be at least $1.00 per share for a minimum of ten consecutive business days during the stated 180-day period.

As a result of the meeting, the one-for-four reverse split of the Company’s Ordinary Shares shall become effective on June 28 2022, as of 4:30 p.m. Eastern Time, with trading currently expected to commence on the post-reverse split-adjusted basis on the NASDAQ Global Select Market as of the opening of trading on Wednesday, June 29, 2022.

Every four shares of the Company’s issued and outstanding Ordinary Shares, upon effectiveness of the reverse share split, will convert automatically into one issued and outstanding share of the Company’s Ordinary Shares, subject to the elimination of fractional shares, with an increase in the par value per share from $0.00375 to $0.015. The reverse share split will affect all issued and outstanding Ordinary Shares, as well as Ordinary Shares underlying stock options, restricted stock units, and other Ordinary Share-based equity grants outstanding immediately prior to the effectiveness of the reverse share split. The Company’s transfer agent will distribute to shareholders of record instructions regarding how to exchange certificates representing the previously outstanding shares for certificates representing the new issued shares.

No fractional shares will be issued in connection with the reverse share split. Shareholders who would otherwise hold a fractional Ordinary Share will receive a cash payment in lieu of such fractional share based on the closing price of the Ordinary Shares on the NASDAQ Global Select Market on the trading day immediately before the effective date of the reverse share split.

Additional information about the reverse share split can be found in the Company’s proxy statement filed with the Securities and Exchange Commission on May 27,2022, copies of which are available at www.sec.gov or at https://www.utstar.com/?q=investor-relations/sec-filing

About UTStarcom Holdings Corp.

UTStarcom is committed to helping network operators offer their customers the most innovative, reliable and cost-effective communication services. UTStarcom offers high performance advanced equipment optimized for the most rapidly growing network functions, such as mobile backhaul, metro aggregation and broadband access. UTStarcom has operations and customers around the world, with a special focus on Japan and India. UTStarcom was founded in 1991 and listed its shares on the Nasdaq Market in 2000 (symbol: UTSI). For more information about UTStarcom, please visit http://www.utstar.com.

For investor and media inquiries, please contact:

UTStarcom Holdings Corp.
Tel: +86 571 8192 8888
Ms. Shelley Jiang, Investor Relations
Email: utsi-ir@utstar.com/ Shelleyjiang@utstar.com /

In the United States:

The Blueshirt Group
Mr. Gary Dvorchak
Email: gary@blueshirtgroup.com

FAQ

What is the significance of the reverse stock split for UTSI shareholders?

The one-for-four reverse stock split is intended to increase the per-share price and help UTStarcom regain compliance with NASDAQ’s minimum bid price requirement.

When did UTStarcom’s reverse stock split take effect?

The reverse stock split took effect on June 28, 2022, at 4:30 p.m. Eastern Time.

Why is UTStarcom under NASDAQ review?

UTStarcom received a notice from NASDAQ indicating it was not in compliance with listing rules due to its share price falling below $1.00.

How will shareholders exchange their old shares after the reverse split?

Shareholders of record will receive instructions from the transfer agent on how to exchange their old share certificates for the new shares.

What changes were made to the share capital of UTStarcom?

The authorized share capital was amended to $943,750 divided into 62,500,000 ordinary shares, increasing the par value from $0.00375 to $0.015.