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Shuttle Pharma faces Nasdaq delisting over equity shortfall

EditorLina Guerrero
Published 09/13/2024, 05:23 PM
SHPH
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Shuttle Pharmaceuticals Holdings, Inc. (Nasdaq:SHPH), a Delaware-based pharmaceutical company, has received a notification from The Nasdaq Capital Market indicating non-compliance with the minimum stockholders' equity requirement. The notice, dated September 10, 2024, specifies that the company's stockholders' equity stands at $801,434, falling short of the $2,500,000 threshold outlined in Nasdaq Listing Rule 5550(b)(1).


The company's current financial position also does not meet the alternative compliance standards based on the market value of listed securities or net income from continuing operations. The Nasdaq's warning does not immediately affect Shuttle Pharmaceuticals' listing status, but it mandates the company to submit a compliance plan by October 25, 2024.


Shuttle Pharmaceuticals has a 45-day window to propose a plan to address the shortfall and regain compliance. If Nasdaq accepts the plan, Shuttle Pharmaceuticals may receive an extension of up to 180 days from the original notification date to meet the listing requirements.


The company is actively exploring options to fulfill the compliance criteria and intends to submit the required plan within the stipulated timeframe. Despite these efforts, the outcome of the plan's acceptance and the company's ability to maintain its Nasdaq listing remain uncertain.


Should Shuttle Pharmaceuticals fail to present an acceptable plan, or if Nasdaq declines to grant an extension and the company does not achieve compliance within the set period, there is a risk of delisting. In such a scenario, Shuttle Pharmaceuticals would have the opportunity to appeal the decision before a Nasdaq hearings panel.


In other recent news, Shuttle Pharmaceuticals has been making significant strides in the pharmaceutical industry. The company recently secured a patent for its selective histone deacetylase (HDAC) inhibitors, a development aimed at enhancing cancer treatments.


As part of their ongoing efforts, Shuttle Pharmaceuticals has also published research on a new compound, SP-1-303, with promising results in inhibiting the growth of estrogen receptor-positive breast cancer cells.


The company has successfully regained compliance with Nasdaq's Minimum Bid Price Rule, ensuring the continued listing of its shares on the Nasdaq stock market. Shuttle Pharmaceuticals has also entered into an Amendment Agreement with Alto Opportunity Master Fund, which includes a $600,000 payment as collateral on an outstanding $1.2 million note.


In the financial realm, Shuttle Pharmaceuticals' stockholders approved a one-for-eight reverse stock split and the company has revealed plans to restate its financial statements for 2022 and the first quarter of 2024 due to identified accounting errors. This restatement will increase the net loss attributable to common stockholders from $3.1 million to $3.7 million for 2022.


Lastly, the company announced executive team changes, including the appointment of Timothy Lorber as its new Chief Financial Officer, while Michael Vander Hoek, the current CFO, will focus on his role as Vice President of Regulatory.


InvestingPro Insights


As Shuttle Pharmaceuticals Holdings, Inc. (SHPH) navigates through its current compliance challenges with Nasdaq, a glance at the real-time data from InvestingPro reveals a market capitalization of just $3.56 million, underscoring the company's small size in the pharmaceutical market. This is further complicated by an adjusted P/E ratio in the last twelve months as of Q2 2024 standing at -0.53, indicating that the company is not generating positive earnings at this time. Additionally, the stock's performance has been underwhelming, with a 1-month total return of -20.0% and a significant 1-year total return decrease of -71.43%.


InvestingPro Tips suggest that Shuttle Pharmaceuticals holds more cash than debt, which could be a silver lining in its balance sheet. However, the company is quickly burning through its cash reserves and has been suffering from weak gross profit margins. These financial metrics may be important considerations for investors as they assess the company's future prospects and its ability to submit an effective compliance plan to Nasdaq.


For those interested in a deeper analysis, there are additional InvestingPro Tips available that provide further insights into Shuttle Pharmaceuticals' financial health and stock performance. These tips can be found at the InvestingPro platform, which includes a comprehensive set of metrics and expert analysis for investors seeking to make informed decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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