Tokyo Lifestyle announces plan of ADS ratio change

Tokyo Lifestyle announced its plan to change the ratio of its American Depositary Shares to its ordinary shares from one ADS representing one ordinary share to one ADS representing 10 ordinary shares. The ADS Ratio Change will become effective on November 15, 2024. For the Company’s ADS holders, the change in the ADS Ratio will have the same effect as a one-for-ten reverse ADS split and will not impact an ADS holder’s proportional equity interest in the Company. The ADS Ratio Change is intended to further support the liquidity in the Company’s ADSs and enable the Company to regain compliance with the Nasdaq minimum bid price requirement. On the Effective Date, registered holders of the Company’s ADSs held in certificated form will be required on a mandatory basis to surrender their certificated ADSs to The Bank of New York Mellon, the depositary bank, for cancellation and received one new ADS in exchange for every 10 existing ADSs surrendered. Holders of uncertificated ADSs in the Direct Registration System and The Depository Trust Company will have their ADSs automatically exchanged. The exchange of every 10 then-held ADSs for one new ADS will occur automatically on the Effective Date, with the then-held ADSs being cancelled and new ADSs being issued by the Depositary. The Company’s ADSs will continue to be traded on the Nasdaq Capital Market under the ticker symbol “TKLF.” 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, and the net cash proceeds from the sale of the fractional ADS entitlements will be distributed to the applicable ADS holders by the Depositary. As a result of the ADS Ratio Change, the ADS trading price is expected to increase proportionally, although the Company makes no assurance that the ADS trading price following the change will be proportionally equal to or greater than the ADS trading price prior to the change, or that the change in the ADS Ratio will have any effect on the liquidity of the Company’s ADSs.