DEF: Urgent.ly Inc. Seeks Stockholder Approval for Reverse Stock Split to Maintain Nasdaq Listing

Urgent.ly Inc. is asking stockholders to approve a reverse stock split and a reduction in authorized shares to regain compliance with Nasdaq's minimum bid price requirement.

Summary

• Urgent.ly Inc. is holding a special meeting on March 12, 2025, to seek stockholder approval for a reverse stock split and a reduction in the number of authorized shares of common stock.
• The company received a notification from Nasdaq on September 30, 2024, indicating non-compliance with the Minimum Bid Price Requirement, as the stock price had been below $1.00 for 30 consecutive business days.
• The proposed reverse stock split would combine outstanding shares at a ratio of 1-for-4, 1-for-6, 1-for-8, 1-for-10, or 1-for-12, to be determined by the board of directors.
• Contemporaneously with the reverse stock split, the total number of authorized shares of common stock would be reduced from 1,000,000,000 to 500,000,000.
• The board of directors reserves the right to abandon the reverse stock split and share reduction if it's no longer in the company's best interest.
• As of the record date, February 14, 2025, there were 13,499,676 shares of common stock outstanding.
• The board recommends voting for the reverse stock split proposal to maintain the company's Nasdaq listing and potentially improve the marketability and liquidity of the stock.

Sentiment

Score: 6

Explanation: The document is neutral in tone, presenting the facts of the proposed reverse stock split. While the company expresses optimism about maintaining its Nasdaq listing, there are also acknowledged risks and uncertainties associated with the proposal.

Positives

• The reverse stock split aims to maintain Urgent.ly's listing on The Nasdaq Capital Market.
• It could potentially improve the marketability and liquidity of the company's common stock.
• A higher stock price may attract a broader range of institutional and other investors.
• The reduction in authorized shares is designed to reduce certain costs for the company.
• The board of directors believes that after the Authorized Share Reduction, the number of shares of common stock available for future issuance is sufficient for current anticipated future needs.

Negatives

• There is no guarantee that the reverse stock split will increase the stock price.
• The total market capitalization of the company may not increase after the reverse stock split.
• The reverse stock split may reduce the liquidity of the common stock and result in higher transaction costs.
• The reverse stock split may not attract certain types of investors, such as institutional investors or investment funds.

Risks

• The reverse stock split may not result in a sustained increase in the stock price.
• The company's financial results, market conditions, and market perception of the business could adversely affect the stock price.
• Delisting from Nasdaq could negatively impact the liquidity of the common stock and make it less attractive to investors.
• The company could be deemed a penny stock, leading to reduced trading and additional state securities regulations.

Future Outlook

The company intends to regain compliance with Nasdaq's listing requirements and potentially improve its stock's marketability through the reverse stock split. The board of directors will determine whether to implement the reverse stock split and at what ratio, based on market conditions and the company's best interests.

Management Comments

• On behalf of our board of directors, we would like to express our appreciation for your continued support of and interest in Urgent.ly.

Industry Context

Reverse stock splits are a common strategy for companies facing delisting from exchanges due to low stock prices. The success of a reverse stock split depends on various factors, including the company's underlying financial performance and market sentiment.

Comparison to Industry Standards

• Many companies in similar situations, such as those in the technology or emerging growth sectors, have used reverse stock splits to maintain exchange listings.
• The effectiveness of a reverse stock split varies, with some companies experiencing a sustained increase in stock price while others see only a temporary effect or further decline.
• Comparisons to other companies that have undergone reverse stock splits, such as [hypothetical company A] or [hypothetical company B], show mixed results depending on their respective business fundamentals and market conditions.

Stakeholder Impact

• Shareholders will be affected by the reverse stock split, potentially seeing a change in the number of shares they own and the per-share price.
• Employees may be impacted if the company's Nasdaq listing is not maintained, which could affect stock-based compensation and the company's ability to attract and retain talent.
• The company's ability to raise capital and maintain relationships with investors could be affected by the reverse stock split and its impact on the stock price.

Next Steps

• Stockholders will vote on the reverse stock split proposal at the special meeting on March 12, 2025.
• The board of directors will determine whether to implement the reverse stock split and at what ratio, if approved by stockholders.
• The company will file an amendment to its Amended and Restated Certificate of Incorporation with the Delaware Secretary of State if the reverse stock split is implemented.

Key Dates

Keywords

reverse stock split, Nasdaq, minimum bid price, authorized shares, stockholders, compliance, listing, common stock, Urgent.ly