U Power Limited Announces 1-for-100 Share Consolidation

Rhea-AI Summary

U Power (UCAR) announces shareholder approval for a 1-for-100 reverse share split to regain Nasdaq compliance.

Financial Analyst

The announcement of U Power Limited's 1-for-100 reverse share split is a strategic financial maneuver designed to address compliance with Nasdaq's minimum bid price requirement. This action typically indicates that a company's share price has been trading below the Nasdaq's stipulated threshold, which necessitates a corrective measure to boost the share price nominally and maintain its listing status.

A reverse split reduces the number of shares outstanding, increasing the price per share correspondingly. However, it does not intrinsically change the company's market capitalization or its underlying value. Investors should note that while this may improve the optics of the stock price, it does not alter the company's fundamentals. Historically, reverse splits have been met with mixed reactions, as they can be perceived as a signal of distress, potentially leading to a short-term decline in investor confidence.

For long-term stakeholders, the pivotal aspect to monitor will be the company's progression towards becoming a comprehensive EV battery power solution provider. Success in this transformation could counterbalance the negative connotations of a reverse split, but this is contingent on effective execution of business strategy and market reception.

Market Research Analyst

The EV battery power solutions sector in China is rapidly evolving, with significant advancements and increasing competition. U Power's vision to pivot into this space suggests an attempt to capture growth opportunities within an industry that is central to the global transition towards clean energy. The reverse share split could be seen as a short-term tactical move to stabilize the company's equity structure and appeal to a broader investor base.

It's important for stakeholders to consider the competitive landscape U Power will be entering. Market dynamics, such as government policies, technological advancements and consumer adoption rates, will play a critical role in determining the company's future prospects. The ability of U Power to leverage its existing vehicle sourcing services into a more lucrative and high-growth battery power market could be a significant growth driver.

However, investors should also be aware of the risks associated with such strategic shifts, including the intense capital requirements and potential execution risks. The success of the Share Consolidation in the short term and the strategic pivot in the long term, will be dependent on U Power's ability to differentiate itself and capitalize on the burgeoning EV market in China.

SHANGHAI , March 29, 2024 /PRNewswire/ -- U Power Limited (Nasdaq: UCAR) (the "Company" or "U Power"), a vehicle sourcing services provider with a vision to becoming a comprehensive EV battery power solution provider in China, today announced that the Company held an extraordinary general meeting of shareholders on Monday, March 25, 2024, at which the shareholders approved the proposal for a 1-for-100 reverse share split of the Company's ordinary shares (the "Share Consolidation"). No fractional shares will be issued in connection with the Share Consolidation and all fractional shares (after aggregating all fractional shares that would otherwise be received by a shareholder) resulting from the Share Consolidation will be rounded up to the whole number of shares. 

At the opening of trading on April 3rd, 2024, the Company's ordinary shares will begin trading on a post-Share Consolidation basis on the Nasdaq Capital Market under the same symbol, "UCAR", with a new CUSIP number of G9520U116. The Share Consolidation is being effectuated primarily to regain compliance with Nasdaq Marketplace Rule 5550(a)(2) related to the minimum bid price per share of the Company's ordinary shares.

About U Power Limited
U Power Limited is a vehicle sourcing services provider, with a vision to becoming an EV market player primarily focused on its proprietary battery-swapping technology, or UOTTA technology, which is an intelligent modular battery-swapping technology designed to provide a comprehensive battery power solution for EVs. Since its operation in 2013, the Company has established a vehicle sourcing network in China's lower-tier cities. The Company has developed two types of battery-swapping stations for compatible EVs and is operating one manufacturing factory in Zibo City, Shandong Province, China. For more information, please visit the Company's website: http://ir.upincar.com/.

Forward-Looking Statements
This press release may contain "forward-looking statements". Forward-looking statements reflect our current view about future events. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "could," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "propose," "potential," "continue" or similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the U.S. Securities and Exchange Commission.

Contact
U Power Limited
Investor Relations Department
Email: ir@upincar.com 

Robin Yang, Partner
ICR, LLC
Email: UPower.IR@icrinc.com
Phone: +1 (212) 475-0415

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SOURCE U Power Limited

What did U Power announce regarding shareholder approval?

U Power announced that shareholders approved a 1-for-100 reverse share split.

Why is the reverse share split being implemented?

The reverse share split is being implemented to regain compliance with Nasdaq Marketplace Rule 5550(a)(2) related to the minimum bid price per share.

When will U Power 's ordinary shares begin trading on a post-Share Consolidation basis?

U Power 's ordinary shares will begin trading on a post-Share Consolidation basis on the Nasdaq Capital Market on April 3rd, 2024.

What will happen to fractional shares after the Share Consolidation?

No fractional shares will be issued, and all fractional shares resulting from the Share Consolidation will be rounded up to the whole number of shares.

What is the new CUSIP number for U Power 's ordinary shares?

The new CUSIP number for U Power 's ordinary shares is G9520U116.