Asset Entities Inc. (NASDAQ:ASST), a provider of prepackaged software services, disclosed on Friday that it has been notified by The Nasdaq Stock Market LLC of its non-compliance with the minimum stockholders’ equity requirement for continued listing on The Nasdaq Capital Market tier.
The notification, received on Tuesday, August 21, 2024, stated that Asset Entities Inc. reported stockholders' equity of $2,097,090 in its Quarterly Report for the period ended June 30, 2024, falling short of the Nasdaq Listing Rule 5550(b)(1) which requires a minimum of $2,500,000. The company also did not meet the alternative compliance standards based on market value of listed securities or net income from continuing operations.
Nasdaq's Listing Rule 5550(b) stipulates three compliance options for companies listed on The Nasdaq Capital Market: maintain stockholders' equity of at least $2,500,000, have a market value of listed securities of at least $35,000,000, or record net income from continuing operations of $500,000 in the last fiscal year or in two of the last three fiscal years.
Despite the notice, the trading of Asset Entities Inc.'s Class B Common Stock on The Nasdaq Capital Market remains unaffected at this time. The company will be included on Nasdaq’s public non-compliance list, accessible on its website, starting five business days from the notification date.
Asset Entities Inc. has until October 7, 2024, to submit a plan to regain compliance. If Nasdaq accepts the plan, the company may be granted an extension of up to 180 days from the notification date to demonstrate compliance. If not accepted, the company has the right to request a hearing before an independent Nasdaq Hearings Panel.
In a separate event reported in a previous 8-K filing on August 15, 2024, Asset Entities Inc. stated it had met the required stockholders' equity threshold as a result of a second closing with Ionic Ventures, LLC, which occurred on July 29, 2024. This transaction involved the sale of 165 shares of the company’s Series A Convertible Preferred Stock for gross proceeds of $1,500,000.
In other recent news, Dallas-based Asset Entities Inc. has made significant strides in maintaining its Nasdaq listing. The company successfully achieved a stockholders' equity of $2,097,090 as of June 2024 and raised $3,000,000 through the issuance of new shares of its Series A Convertible Preferred Stock to Ionic Ventures, LLC.
This funding round was instrumental in bringing the company's stockholders' equity above the $2,500,000 threshold required by The Nasdaq Capital Market for continued listing.
Asset Entities Inc. also regained Nasdaq compliance with bid price and stockholders' equity requirements. The company's Class B Common Stock maintained a closing bid price of at least $1.00 over ten consecutive business days, satisfying the Nasdaq Listing Rule 5550(a)(2).
Furthermore, Asset Entities Inc. announced a 1-for-5 reverse stock split of its common stock, a strategic move aimed at regaining compliance with Nasdaq's minimum bid price requirement for continued listing.
The reverse stock split applies to both its class A and class B common stock and consolidates every five shares of issued and outstanding common stock into one share.
In addition, the company has amended its securities purchase agreement, modifying the rights of its security holders. The company committed to a reverse stock split of its Class B Common Stock if its closing price falls to or below $0.0855 for ten consecutive trading days.
In more recent developments, Asset Entities Inc. has filed a shelf registration with the U.S. Securities and Exchange Commission, potentially raising up to $100 million in capital.
The company also announced a partnership with Zendrop, a dropshipping company, to offer a range of services through its Ternary platform.
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