XChange TEC.INC Announces Plan to Implement ADS Ratio Change

Rhea-AI Summary

XChange TEC.INC (NASDAQ: XHG) has announced a significant change in its American Depositary Shares (ADS) ratio, effectively implementing a 1-for-20 reverse ADS split. The ratio will change from 1 ADS representing 120 Class A ordinary shares to 1 ADS representing 2,400 Class A ordinary shares. This change is scheduled to take effect on May 9, 2025.

ADS holders will be required to surrender their existing ADSs to The Bank of New York Mellon, receiving 1 new ADS for every 20 old ADSs held. The company's trading symbol "XHG" on Nasdaq will remain unchanged. Fractional ADS entitlements will be aggregated, sold, and the proceeds distributed to affected holders.

Positive

• The reverse ADS split could help maintain Nasdaq listing requirements if the stock price was too low
• Higher ADS price might attract institutional investors who have minimum price requirements

Negative

• Transaction costs and inconvenience for ADS holders who need to exchange their securities
• Fractional shares will be forcibly liquidated, potentially causing unwanted taxable events for some investors

SHANGHAI, May 6, 2025 /PRNewswire/ -- XChange TEC.INC (NASDAQ: XHG) (the "Company") today announced that it plans to change the ratio of the American depositary shares ("ADSs") representing its Class A ordinary shares from one (1) ADS representing one hundred and twenty (120) Class A ordinary share to one (1) ADS representing two thousand four hundred (2,400) Class A ordinary shares.

For the ADS holders, the change in the ADS ratio will have the same effect as a one-for-twenty reverse ADS split. There will be no change to the Company's Class A ordinary shares. The effect of the ratio change on the ADS trading price on The Nasdaq Capital Market is expected to take place at the open of trading on May 9, 2025 (U.S. Eastern Time) (the "Effective Date"). Holder of ADSs will be required on a mandatory basis to surrender their old ADSs to the Company's depositary, The Bank of New York Mellon (the "Depositary"), in exchange for every twenty (20) then-held (old) ADSs to receive one (1) new ADS. The ADSs will continue to be traded on The Nasdaq Capital Market under the symbol "XHG."

No fractional new ADSs will be issued in connection with the change in the ADS ratio. Instead, fractional entitlements to new ADSs will be aggregated and sold by the Depositary and the net cash proceeds from the sale of the fractional ADS entitlements (after deduction of fees, taxes and expenses) will be distributed to the applicable ADS holders by the Depositary.

As a result of the change in the ADS ratio, the ADS price is expected to increase proportionally, although the Company can give no assurance that the ADS price after the change in the ADS ratio will be equal to or greater than twenty times the ADS price before the change.

View original content:https://www.prnewswire.com/news-releases/xchange-tecinc-announces-plan-to-implement-ads-ratio-change-302446922.html

SOURCE XChange TEC.INC

FAQ

What is the new ADS ratio for XChange TEC.INC (XHG) and when does it take effect?

The new ratio will be 1 ADS representing 2,400 Class A ordinary shares, compared to the previous 1:120 ratio. This change takes effect on May 9, 2025.

How will XHG's reverse ADS split affect existing shareholders?

Shareholders will receive 1 new ADS for every 20 old ADSs held. Fractional shares will be sold and proceeds distributed to affected holders.

Will XHG's stock symbol change after the ADS ratio adjustment?

No, XHG will continue to trade under the same symbol on the Nasdaq Capital Market.

What happens to fractional shares in XHG's ADS ratio change?

Fractional new ADSs will be aggregated and sold by the depositary bank, with net proceeds distributed to affected ADS holders.

Does XHG's ADS ratio change affect the underlying Class A ordinary shares?

No, there will be no change to the company's underlying Class A ordinary shares.