Connexa Announces 1:20 Reverse Split to Remedy Bid Price Delisting Notice
Connexa Sports Technologies (Nasdaq: YYAI) has announced a 1-for-20 reverse stock split of its common stock, effective June 27, 2024. This move aims to address the Nasdaq minimum bid price requirement and prevent delisting. The split will consolidate every 20 shares into one, reducing the outstanding shares to 2,042,669. Existing shareholders' equity percentages remain unchanged, except for minor adjustments due to fractional shares, which will be rounded up. Post-split, the stock must close at or above $1.00 per share for ten consecutive days to regain compliance. ClearTrust, will manage the exchange process.
- The reverse stock split could increase the market price of Connexa's common stock, potentially regaining compliance with Nasdaq's minimum bid price requirement.
- The company’s stockholders already approved the reverse split proposal, indicating shareholder support.
- Post-split, the total number of outstanding shares will be significantly reduced to 2,042,669, which may increase per-share value.
- There is no assurance that the reverse stock split will effectively increase the market price to meet Nasdaq’s $1.00 minimum bid requirement.
- Reverse stock splits can sometimes signal financial distress, possibly affecting investor sentiment negatively.
The 1-for-20 reverse stock split announced by Connexa Sports Technologies is a significant move aimed at increasing the stock price to meet Nasdaq's minimum bid price requirement of $1.00 per share. This step is vital for the company to avoid delisting, which could severely impact its liquidity and investor confidence.
Reverse stock splits are often viewed as a last resort to artificially inflate stock prices without improving the underlying business fundamentals. While this maneuver can temporarily boost the share price, it does not solve the core issues causing the stock's low valuation. Investors should be cautious as such actions can sometimes signal deeper financial troubles.
In the short-term, the reverse split may provide a temporary lift in the stock price, potentially attracting both retail and institutional investors who rely on stock price thresholds for trading decisions. However, in the long-term, if the company fails to demonstrate actual business growth and profitability improvements, the stock might face downward pressure again.
Additionally, there will be a reduction in the number of outstanding shares to 2,042,669, which could lead to higher volatility due to decreased liquidity. Retail investors should keep an eye on the company's upcoming earnings reports and operational updates to make informed decisions.
From a market perspective, the reverse stock split by Connexa Sports Technologies is a double-edged sword. While it is intended to help the company regain compliance with Nasdaq's listing requirements, it may also be perceived negatively by the market. Such actions can sometimes be interpreted as signals that the company's stock has performed poorly over an extended period.
Market sentiment around reverse splits is generally cautious because it does not address the underlying business challenges. Historically, stocks that undergo reverse splits tend to underperform in the long run if there are no substantial improvements in the company's operations or market conditions.
For retail investors, it is essential to consider the broader market context and the company's strategic direction. Monitoring market reactions post-split, as well as any new strategic initiatives announced by Connexa, will be important in assessing whether this move will result in sustained positive momentum or if it will be a fleeting boost followed by further decline.
Investors should also pay attention to any changes in trading volumes and institutional interest in the stock, as these can provide insights into market confidence in Connexa's future prospects.
- Reverse Split has been approved to take place on June 27, 2024
Windsor Mills, MD, June 25, 2024 (GLOBE NEWSWIRE) -- Connexa Sports Technologies Inc. (Nasdaq: YYAI), the owner of Slinger Bag and Gameface, announced today announced that it will effect a 1-for-20 reverse stock split of its common stock, par value
At the Company’s 2024 Annual Meeting of Stockholders on May 15, 2024, the Company’s stockholders approved the proposal to authorize a reverse stock split of the Company’s common stock by a ratio of any whole number between 1-for-10 and 1-for-100 to be determined at the discretion of the Board of Directors.
The reverse stock split is intended to increase the market price of the Company’s common stock to regain compliance with the minimum bid price requirement for continued listing on Nasdaq, but there can be no assurance that the reverse split will have such effect. Following the reverse split, the Company must see a closing bid price of its common stock of at least
As a result of the reverse stock split, every 20 shares of the Company’s common stock will automatically be combined into one share of common stock. The reverse stock split will affect all stockholders uniformly and will not alter any stockholder’s percentage ownership interest in the Company’s equity, except for immaterial adjustments that may result from the treatment of fractional shares as described below. No fractional shares will be issued in connection with the reverse stock split, and fractional shares resulting from the reverse split will be rounded up to the nearest whole share.
The reverse stock split will occur automatically on the effective date of June 27, 2024, without any additional action on the part of our stockholders. ClearTrust, LLC is acting as the exchange agent for the reverse stock split and will send stockholders a transaction statement indicating the number of shares of common stock that stockholders hold after the reverse stock split. Stockholders owning shares via a broker, bank, trust, or other nominee will have their positions automatically adjusted to reflect the reverse stock split, subject to such broker’s particular processes, and will not be required to take any action in connect with the reverse stock split.
More detailed information on Connexa Sports Technologies and Slinger Bag can be found at www.connexasports.com
About Connexa Sports Technologies:
Connexa Sports is a leading connected sports company delivering products, technologies, and Sport-as-a-Service across a range of sport verticals. Connexa’s mission is to reinvent sports through technological innovation driven by an unwavering focus on today’s sports consumer.
YYAI Contact Information:
investors@connexasports.com
www.connexasports.com
Additional Information and Where to Find It
The Company’s stockholders will be able to obtain relevant documents filed with the SEC from the SEC’s website at www.sec.gov or from the Company’s website at
https://www.connexasports.com/investor-relations/
Forward-Looking Statements
This press release contains forward-looking statements. Statements that are not historical facts, including statements about beliefs or expectations, are forward-looking statements. These statements are based on plans, estimates, expectations and projections at the time the statements are made, and readers should not place undue reliance on them. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as “may,” “will,” “should,” “expect,” “opportunity,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these terms or other comparable terms. Forward-looking statements involve inherent risks and uncertainties and readers are cautioned that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statements.
Many factors could cause actual future events to differ materially from the forward-looking statements in this communication, including but not limited to: our ability to cure any deficiencies in compliance with Nasdaq’s minimum bid price requirement or maintain compliance with other Nasdaq Listing Rules; the ability of the reverse split to allow us to regain compliance with Nasdaq’s minimum bid price requirement; our ability to obtain any additional relief necessary to regain compliance from Nasdaq or to meet applicable Nasdaq requirements for any such relief; and risks related to the substantial costs and diversion of personnel’s attention and resources due to these matters. While we are taking actions to address our non-compliance with Nasdaq’s minimum bid price requirement, there can be no assurance that we will regain compliance. Continued non-compliance or a delisting from Nasdaq would materially and adversely affect our ability to raise capital and our financial condition and business. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and, except as required by law, the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.
Forward-looking statements included in this report speak only as of the date each statement is made. Neither the company nor any person undertakes any obligation to update any of these statements in light of new information or future events, except to the extent required by applicable law.
FAQ
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