Jianzhi Education Announces Plan to Implement ADS Ratio Change

Rhea-AI Summary

Jianzhi Education Technology Group (NASDAQ: JZ) announced plans to implement an ADS ratio change, effectively executing a 1-for-10 reverse ADS split. The ratio will change from 1 ADS representing 6 ordinary shares to 1 ADS representing 60 ordinary shares, effective June 16, 2025. This change will reduce outstanding ADSs from 7,716,666 to approximately 771,666. The Bank of New York Mellon will manage the exchange process, with fractional ADSs being aggregated and sold, with proceeds distributed to applicable holders. The company will maintain its NASDAQ listing under symbol JZ with a new CUSIP number 47737L302. While the change is expected to proportionally increase the ADS trading price, the company provides no guarantees about the post-change trading value.

Positive

• The ADS ratio change could help maintain NASDAQ listing requirements
• The change may result in a higher trading price per ADS
• No impact on underlying ordinary shares structure

Negative

• Reduction in the total number of tradeable ADSs could potentially affect liquidity
• No guarantee of maintaining proportional trading value after the change
• Holders with fractional shares will be forced to sell

Insights

Financial Structure Analyst

Jianzhi's 1:10 reverse split aims to boost share price, often a concerning move suggesting compliance issues or declining value.

Jianzhi Education's announcement of an ADS ratio change effectively constitutes a 1-for-10 reverse split, a significant structural modification with notable implications. The change will reduce outstanding ADSs from 7,716,666 to approximately 771,666 while maintaining the same underlying ordinary share count.

This maneuver is technically labeled as an "ADS Ratio Change" but functions identically to a reverse split - each investor will hold fewer ADSs representing the same ownership percentage. The mechanics involve changing from 1 ADS representing 6 ordinary shares to 1 ADS representing 60 ordinary shares.

The timing is imminent, scheduled for June 16, 2025, giving shareholders minimal adjustment time. Fractional shares will be sold with proceeds distributed to affected holders, creating potential tax implications and minor ownership dilution for some investors.

While the company states the trading price should increase proportionally, they notably include cautionary language that they "can give no assurance" about post-split pricing. This protective disclaimer hints at uncertainty about market reception.

Reverse splits typically signal underlying challenges. Companies generally implement such measures to boost share prices when facing potential delisting threats due to minimum price requirements or to address perception issues from ultra-low share prices. The absence of any strategic rationale in the announcement is telling - companies executing reverse splits from positions of strength typically explain their strategic objectives clearly.

This structural change warrants careful monitoring as reverse splits frequently precede continued price erosion after the initial mathematical adjustment, particularly when implemented without addressing fundamental business challenges.

BEIJING, June 12, 2025 /PRNewswire/ -- Jianzhi Education Technology Group Company Limited (the "Company" or "Jianzhi") (NASDAQ: JZ), a leading provider of digital educational content in China, today announced that it plans to change the ratio of its American Depositary Shares ("ADSs") from current one (1) ADS representing six (6) ordinary shares to one (1) ADS representing sixty (60) ordinary shares(the "ADS Ratio Change"). The ADS Ratio Change is expected to become effective at the beginning of trading on or about June 16, 2025, U.S. Eastern Time (the "Effective Date")

For Jianzhi's ADS holders, the ADS Ratio Change will have the same effect as a one-for-ten reverse ADS split. Each ADS holder of record on the Effective Date will be required to surrender and exchange every ten (10) existing ADSs then held for one (1) new ADS. The Bank of New York Mellon, as the depositary bank for Jianzhi's ADSs, will arrange for the exchange of the current ADSs for the new ones. The ADS Ratio Change will reduce the number of outstanding ADSs of the Company from 7,716,666 to approximately 771,666. Jianzhi's ADSs will continue to be traded on the Nasdaq Stock Exchange under the symbol "JZ" and a new CUSIP number 47737L302 has been assigned as a result of the ADS Ratio Change.

No fractional new ADSs will be issued in connection with the ADS Ratio Change. Instead, fractional entitlements to new ADSs will be aggregated and sold by the depositary bank, and the net cash proceeds from the sale of the fractional ADS entitlements (after deduction of fees, taxes, and expenses, where applicable) will be distributed to the applicable ADS holders by the depositary bank. The ADS Ratio Change will have no impact on Jianzhi's underlying ordinary shares, and no ordinary shares will be issued or canceled in connection with the ADS Ratio Change.

As a result of the ADS Ratio Change, Jianzhi's ADS trading price is expected to increase proportionally, although the Company can give no assurance that the ADS trading price after the ADS Ratio Change will be equal to or greater than three times the ADS trading price before the change.

About Jianzhi Education Technology Group Company Limited

Headquartered in Beijing and established in 2011, Jianzhi is a leading provider of digital educational content in China and has been committed to developing educational content to fulfill the massive demand for high-quality, professional development training resources in China. Jianzhi started operations by providing educational content products and IT services to higher education institutions. Jianzhi also provides products to individual customers. Leveraging its strong capabilities in developing proprietary professional development training content and success in consolidating educational content resources within the industry, Jianzhi has successfully built up a comprehensive, multi-dimensional digital educational content database which offers a wide range of professional development products. Jianzhi embeds proprietary digital education content into the self-developed online learning platforms, which are provided to a wide range of customers through its omni-channel sales system. Jianzhi is also fully committed to the digitalization and informatization of the education sector in China. For more information, please visit: www.Jianzhi-jiaoyu.com.

Safe Harbor Statement

This press release (the "Press Release") contains statements that may constitute "forward-looking" statements pursuant to the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to," and similar statements. Statements that are not historical facts, including statements about the Company's beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this Press Release is as of the date of this Press Release, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

View original content:https://www.prnewswire.com/news-releases/jianzhi-education-announces-plan-to-implement-ads-ratio-change-302480048.html

SOURCE Jianzhi Education Technology Group Company Limited

FAQ

What is the new ADS ratio for Jianzhi Education (JZ) stock?

The new ratio will be 1 ADS representing 60 ordinary shares, changed from the previous 1 ADS representing 6 ordinary shares, effective June 16, 2025.

How will the JZ ADS ratio change affect existing shareholders?

Shareholders will need to exchange every 10 existing ADSs for 1 new ADS. Fractional ADSs will be sold and proceeds distributed to holders.

How many ADSs will Jianzhi Education have after the ratio change?

The number of outstanding ADSs will decrease from 7,716,666 to approximately 771,666.

Will Jianzhi Education's ADS ratio change affect its ordinary shares?

No, the ADS ratio change will have no impact on Jianzhi's underlying ordinary shares, and no ordinary shares will be issued or canceled.

What is the new CUSIP number for Jianzhi Education after the ADS ratio change?

The new CUSIP number assigned is 47737L302.