BURLESON, TX - Sadot Group Inc. (NASDAQ:SDOT), a company involved in the global food supply chain, has announced a 1-for-10 reverse stock split set to take effect on October 18, 2024. The action aims to comply with NASDAQ's minimum share price requirement for continued listing.
The reverse stock split, approved by the Board of Directors on September 25, 2024, will reduce the number of outstanding shares from approximately 57.4 million to about 5.74 million. This change will occur without any adjustment to the par value of shares, which remains at $0.0001. Consequently, the total number of authorized shares will decrease proportionally from 200 million to 20 million.
As a result of the reverse stock split, every 10 shares of Sadot's issued and outstanding common stock will be converted into one share. The company's stock will continue to be traded on The Nasdaq Capital Market under the ticker "SDOT" and will begin trading on a post-split basis when the market opens on the effective date. A new CUSIP number, 627333305, will be assigned to the common stock following the reverse stock split.
Adjustments will also be made to the number of shares issuable upon the exercise or vesting of outstanding stock options and restricted stock units, as well as to the exercise or conversion prices. The number of shares issuable under the company's equity incentive plans and other existing agreements will be similarly adjusted. No fractional shares will be issued; instead, fractional shares resulting from the reverse stock split will be rounded up to the nearest whole share.
This corporate action will uniformly affect all common stockholders and will not alter any stockholder's percentage interest in the company's equity. Sadot's transfer agent, Computershare, Inc., will provide information to stockholders regarding the adjustment of their stock ownership. Stockholders with shares in book-entry form or held through a bank, broker, or other nominee will see their accounts automatically adjusted and do not need to take any action. Beneficial holders with questions about the process are encouraged to contact their respective bank, broker, or nominee.
The information in this article is based on a press release statement from Sadot Group Inc.
In other recent news, Sadot Group Inc. has been actively evolving its business strategy. The company initiated its first trades through its new Canadian subsidiary, Sadot Canada Inc., marking a significant step in its global expansion strategy. Additionally, Sadot Group sold its Superfit Foods LLC asset, signaling the start of its exit from the restaurant industry to focus on its core agri-commodity businesses.
The company also conducted its first agri-commodity trade in Brazil via its subsidiary, Sadot Brasil Ltda, a move indicating a diversification strategy in the $7.3 billion sesame market. These recent developments underscore Sadot Group's efforts to enhance its position in the global agri-commodity market.
Furthermore, Sadot Group completed the refranchising of its last company-owned Muscle Maker Grill location, transitioning to a fully franchised model. This strategic move is expected to reduce corporate overhead and create a new royalty revenue stream. These are all recent developments in Sadot Group's continuing efforts to refine its focus and streamline operations.
InvestingPro Insights
As Sadot Group Inc. (NASDAQ:SDOT) prepares for its reverse stock split, investors should consider some key financial metrics and insights from InvestingPro. The company's market capitalization stands at a modest $18.78 million, reflecting its current position in the market.
One of the most relevant InvestingPro Tips for this situation is that Sadot's "price has fallen significantly over the last year," with a one-year price total return of -55.32%. This decline likely contributed to the need for the reverse stock split to meet NASDAQ's minimum share price requirement. Additionally, the tip that the company is "quickly burning through cash" may explain the urgency of this corporate action.
Despite these challenges, it's worth noting that Sadot's revenue growth remains positive, with a 20.27% increase over the last twelve months as of Q2 2024. However, the company faces profitability issues, as evidenced by its negative P/E ratio of -4.77 and operating income margin of -1.81%.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Sadot Group Inc., providing a deeper understanding of the company's financial health and market position.
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