Toughbuilt Industries , Inc. (NASDAQ:TBLT), a company specializing in cutlery, hand tools, and general hardware, is set to be delisted from the Nasdaq Capital Market. The Irvine, California-based manufacturer received notice from Nasdaq on August 7, 2024, that its common stock will be suspended from trading starting Friday, August 9, 2024.
The delisting notice follows the company's decision to withdraw its appeal to the Nasdaq Hearings Panel. Although Toughbuilt had regained compliance with Nasdaq's requirements for board independence earlier on the same day, it remained non-compliant with Nasdaq's filing requirements, as outlined in Nasdaq Listing Rule 5250(c)(1). Additionally, concerns about the independence of a former director under Nasdaq Rule 5101 and IM-5101-1 contributed to the delisting decision.
As a result of the suspension, Toughbuilt's common stock will be eligible for trading on the OTC Markets Pink tier for one day, after which it may trade in the OTC Markets' "Expert" market. This temporary measure will remain in effect until the company meets its SEC reporting obligations. Toughbuilt is working to file its overdue annual and quarterly reports, including the Form 10-K for the fiscal year ended December 31, 2023, and Forms 10-Q for the first and second quarters of 2024.
Once Toughbuilt becomes current with its SEC filings, the company anticipates that its common stock may be traded on the OTCQB market tier. Toughbuilt's Chief Financial Officer, Martin Galstyan, signed off on the SEC filing on Thursday, August 8, 2024, marking the formal acknowledgment of the company's regulatory status and its commitment to addressing the issues leading to the delisting.
In other recent news, ToughBuilt Industries (NASDAQ:TBLT), Inc. is facing several significant changes and challenges. The company announced the appointment of Monica Pitterle, CPA, as a new independent director and chair of the Audit Committee. Pitterle's extensive experience in financial management, with roles at Comcast/Time Warner and Ernst & Young, will be leveraged to strengthen ToughBuilt's corporate governance and oversight capabilities.
Concurrently, ToughBuilt has announced the immediate resignation of Director Linda Moossaian. The company assures this departure was not related to any disagreements with the company's operations, policies, or practices. ToughBuilt is now actively seeking to fill the vacancy, prioritizing diversity and expertise.
InvestingPro Insights
As Toughbuilt Industries faces delisting from the Nasdaq Capital Market, investors are closely monitoring the company's financial health and stock performance. According to InvestingPro data, Toughbuilt's market capitalization stands at a modest $3.11 million. The company's price-to-book ratio as of the last twelve months leading up to Q3 2023 is 0.47, which could suggest that the stock is undervalued relative to its assets. However, the revenue growth has declined by 0.45% over the same period, indicating potential challenges in the company's operations.
InvestingPro Tips reveal that Toughbuilt operates with a significant debt burden and may have trouble making interest payments on its debt, which is a critical consideration for investors given the recent delisting news. The stock has also experienced high price volatility, with a 107.66% return over the last three months, yet a -76.57% return over the last year, reflecting the stock's erratic movements and the uncertain outlook for the company.
For investors seeking more comprehensive analysis, there are additional InvestingPro Tips available for Toughbuilt Industries, which can be found at https://www.investing.com/pro/TBLT. These tips could provide further insights into the company's financial situation and help investors make more informed decisions amid the current challenges Toughbuilt is facing.
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