Nasdaq-listed Entertainment Gaming Asia Inc has announced a one-for-four reverse split of the company’s common stock and corresponding decrease in the number of authorised shares of common stock.
“The company is effecting the reverse split in an effort to regain compliance with the Nasdaq Stock Market LLC’s minimum bid price requirement for its capital market,” Entertainment Gaming Asia said in a press release on Tuesday.
The exercise is intended to increase the per share trading price of the company’s common stock to satisfy the US$1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market.
“However, there can be no assurance that the reverse stock split will enable the company to regain compliance with the minimum bid price or maintain its listing,” Entertainment Gaming Asia pointed out.
The firm’s shares closed flat on Tuesday at US$0.46.
The reverse split will take effect prior to market opening on Thursday.
Entertainment Gaming Asia is a gaming company focused on the emerging gaming markets of Asia. It operates slot machines on a participation basis and also supplies gaming chips and plaques to casinos. It currently operates one property called Dreamworld Club Poipet (pictured) in northwestern Cambodia in the province of Banteay Meanchey.
“We are effecting the reserve split as a means to regain listing compliance,” company chairman and chief executive Clarence Chung Yuk Man said in a statement.
He added: “We are focused on improving our operating performance and are seeking new projects to fuel long-term growth for the company. We believe we have significantly improved our positioning to secure new gaming projects following the successful completion of our recent rights offering.”
As a result of the rights offering, Entertainment Gaming Asia raised net cash proceeds of approximately US$14.0 million and became an indirect, majority-owned subsidiary of Melco International Development Ltd, headed by casino investor Lawrence Ho Yau Lung.
The reverse split will reduce the number of shares of outstanding common stock of Entertainment Gaming Asia from approximately 57.9 million pre-split to approximately 14.5 million post-split. The number of authorised shares of common stock will be reduced from 75.0 million to approximately 18.8 million.
Following the exercise, the company’s shares will continue to trade on the Nasdaq Capital Market under the symbol EGT.
