Stock Market

ETAO International Co., Ltd. Conducts a 1 for 20 Reverse Stock Split and Announces Share Capital Modifications

NEW YORK, March 21, 2024 /PRNewswire/ -- ETAO International Co., Ltd. (“the Company,” “we,” or “ETAO”) has recently disclosed modifications in its share structure to its investors, which include a 1 for 20 reverse split of its ordinary shares, a boost in authorized shares, and a reconfiguration of the company's share capital. This announcement follows the shareholder approval on February 16, 2024, and is anticipated to be instituted around March 26, 2024.

As the transformation takes effect, ETAO shareholders are set to receive one new ordinary share for each twenty shares presently held. The trading of these shares on a split-adjusted basis is slated to commence at the opening of the market on March 26, 2024.

Details of the Reverse Stock Split

ETAO has stated that the intended reverse share split is expected to increment the trading price of the company's ordinary shares by an approximate factor of twenty, compared to the trading price before the change. However, the company makes it clear that there are no assurances regarding the post-split share price, including its stability or its ability to stay higher than the pre-split price.

Corporate Share Structure Reorganization

The revised share structure showcases (i) 200,000,000 ordinary shares with a nominal value of US$0.002 each, subdivided into 150,000,000 Class A ordinary shares, and 50,000,000 Class B ordinary shares, also valued at US$0.002 each; and (ii) 50,000,000 preferred shares, with par value US$0.002 each.

Following the restructuring, each existing ordinary share of ETAO, with the exception of those owned by Mr. Wensheng Liu – the CEO and Chairman – will be converted to one Class A Ordinary Share. The ordinary shares held by Mr. Liu will transition into Class B Ordinary Shares, which grant him thirty votes per share. Prior to this change, Mr. Liu exercised 48.5% of the total voting power, which will increase to 86.7% immediately after the restructuring.

The Class A Ordinary Shares will persist in being listed and traded on the Nasdaq Capital Market under the ticker "ETAO." In line with these changes, the company has announced the adoption of the Amended and Restated Articles and Memorandum of Association.

Impact on Stock Options and Restricted Shares

ETAO's approach includes proportional adjustments to the quantity of ordinary shares conferred by existing stock options and restricted shares, in line with the reverse split. Correspondingly, the exercise prices associated with these stock options will be modified to reflect the split.

Handling Fractional Shares

Shareholders who would otherwise receive fractional shares from the reverse split will be compensated with a rounding up to the nearest whole share, thus eliminating the issuance of fractional shares.

Distribution of New Stock Certificates

Concurrent with the reverse share split, ETAO will issue new share certificates to its investors. To facilitate this, ETAO's transfer agent, Continental Stock Transfer & Trust Company, will oversee the exchange process. Shareholders registered on the company's books will be sent a letter of transmittal with the necessary instructions to trade in their old share certificates soon after the reverse split becomes effective. It is advised that shareholders wait for this letter before sending in their old stock certificates. Those holding their shares through brokers or nominees will be directed by their respective institutions on the procedure to follow.

For further assistance, shareholders and brokers are directed to contact Continental Stock Transfer & Trust Company at 212-845-5294 for additional information.

About ETAO International Co., Ltd.

ETAO International Co., Ltd., based in the Cayman Islands, aspires to be a front-runner in the digital healthcare arena by offering a wide range of services, including telemedicine, hospital care, primary care, pharmacy services, and comprehensive health insurance. The company's brand, ETAO, suggests a commitment to providing exceptional medical care. Though incorporated in the Cayman Islands, ETAO's principal operations are conducted through entities affiliated with the company in China.

Forward-Looking Statements

This press release includes certain projections and predictions branded as "forward-looking statements." These comprise statements that do not pertain to historical facts and typically contain optimistic language. There is a typical acknowledgment that such statements, while founded on reasonable assumptions, carry inherent risks and unpredictabilities that may lead to actual outcomes differing markedly from such forecasts. It's advised that reliance on these predictive statements should be tempered with caution, reflecting only views as of the press release date. Factors such as the ongoing COVID-19 pandemic's impact on operations, product demand, supply chain, and overall economic activity may significantly shape these outcomes. Duly, these forward-looking statements are subject to amendment post the release date and the company is not bound to update them, barring compliance with applicable securities laws.

Further details on these matters, including potential risks, are available through the Company's regular reports, which are filed with the Securities and Exchange Commission (SEC). These documents can be accessed through the SEC's website at http://www.sec.gov.

Related Links: For more insights into ETAO's operations and updates, interested parties can visit https://www.etao.world.

Media Contact:

Wilson Liu Phone: 347-306-5134 Email: [email protected]

SOURCE: ETAO International Co., Ltd.

Clarification on Prior Announcements

This press release aims to clarify and correct details related to ETAO International Co., Ltd.'s reverse stock split. An earlier version dated March 19, 2024, has been supplanted by this amended statement, which provides precise and comprehensive information meant to be the reference for all stakeholders regarding ETAO’s corporate actions.

ETAO International Co., Ltd. has indeed taken a strategic step in reconfiguring its share structure. The reverse share split, along with modifications in the share capital, may lead to positive outcomes for the company and its shareholders, although the future remains uncertain, as forewarned. The planned reorganization reflects the company's proactive alignment towards a favorable market position.

Conclusively, ETAO's approach towards increased shareholder value, enhanced corporate governance, and the bolstered confidence from the revised voting power distribution is evident. While financial markets are unpredictable, and the actual impact of these changes will only be measurable in the aftermath, ETAO's transparency with its investors regarding expectations and potential risks is to be commended. Stakeholders are now equipped to observe the ensuing market reactions as the company enters this new phase with cautious optimism.

The aforementioned reverse stock split is a move that mirrors a frequent corporate strategy used across various industries, aiming at improving market perception and meeting regulatory listing requirements. ETAO's adjustment reflects a calculated decision to navigate the ever-evolving market landscape, especially within the volatile health sector. Analysts and investors alike will be monitoring the stock's performance to gauge the effectiveness of such financial maneuvers in the real world.

Investors and observers are encouraged to keep an eye on ETAO International Co., Ltd. as it progresses with its strategic pivot. The updated corporate structure, along with its digital healthcare goals, positions ETAO to potentially play a significant role in transforming the medical industry, addressing the changing needs of patients, and offering a comprehensive range of life-long healthcare services. Integration of these multiple facets of healthcare under the ETAO brand could pave the way for a new era of accessible, high-quality medical solutions.

While the company navigates this strategic transition, the healthcare sector continues to rapidly evolve, driven by technological advancements, changing regulations, and consumer expectations. ETAO's investment into rebranding and restructuring reflects a conscious effort to stay ahead in this dynamic environment and potentially redefine the models of healthcare delivery. The company's progress and adaptability serve as testaments to the resilience and potential of digital health ventures worldwide.

The recent corporate announcement marks not only a significant change for ETAO International Co., Ltd. but also a signal to the market of the company's intent to scale its operations and fulfill its mission as a leader in digital healthcare. The increased trading price is hoped to attract a wider array of investors and enhance visibility in the market, which could lead to further growth and investment opportunities.

As the reverse stock split of ETAO International Co., Ltd. becomes effective, all eyes will be on the market response and the company’s future endeavors. It sets a stage for arguably one of the pivotal moments in the company’s history, not only changing its capital structure but also potentially altering its future trajectory in the healthcare domain. The next few trading sessions post-March 26, 2024, will be critically observed by shareholders, analysts, and industry experts who continue to assess the impact of this corporate maneuver.

With this detailed report, ETAO International Co., Ltd. has taken definitive steps to ensure full disclosure and transparency regarding its financial decisions and strategies going forward. Stakeholders are provided with a profound insight into the strategic structuring decision and are updated comprehensively. This level of transparency and forthcoming information is undoubtedly beneficial for existing and potential investors as they evaluate the company’s direction and stability.

As we conclude, the forward momentum generated by this announcement will be critical for the continued success and influence of ETAO within the digital healthcare industry. The conversion and restructuring efforts will likely resonate deeply within the investment community as ETAO solidifies its commitment to shaping the future of healthcare with innovative services and an advanced approach to comprehensive patient care around the globe.