Wag! Group Co. (NASDAQ:PET), a provider of personal services, has received a notice from Nasdaq's Listing Qualifications Department indicating non-compliance with the exchange's listing rules. The company's common stock has fallen below the minimum bid price of $1.00 for 30 consecutive business days, from August 9 to September 23, 2024. Additionally, the company's Market Value of Listed Securities (MVLS) was under the required $50 million from August 8 to September 23, 2024.
This notification, received on Monday, does not immediately affect Wag! Group Co.'s listing on the Nasdaq Global Market. The company has been granted a 180-day period, until March 24, 2025, to meet the minimum bid price and MVLS requirements. Compliance can be regained if the bid price of Wag! Group Co.'s common stock closes at $1.00 or higher for at least 10 consecutive business days and the MVLS is at or exceeds $50 million for the same period.
If Wag! Group Co. fails to comply by the deadline, the company may face delisting. However, it may appeal any delisting decision or consider transferring to the Nasdaq Capital Market, which has different listing requirements. The company plans to monitor its stock price and MVLS closely and explore options to address the non-compliance.
In other recent news, pet care service provider Wag! reported a 6% decrease in revenues to $18.7 million in the second quarter of 2024, alongside a record increase in adjusted EBITDA to $1.6 million. The revenue decrease was attributed to a strategic decision to reduce marketing expenses and boost short-term profitability. Furthermore, Wag! completed a $10 million public offering, the net proceeds of which are earmarked for significant debt payment.
The company is prioritizing debt refinancing with the aim of achieving an 8-12% EBITDA margin by 2025. Wag! also has $9 million in cash reserves and anticipates sufficient working capital for 2025 profitability. Meanwhile, the 2024 revenue forecast remains between $92 million and $102 million, with adjusted EBITDA projected to be in the range of $4 million to $8 million.
InvestingPro Insights
Recent InvestingPro data sheds light on Wag! Group Co.'s (NASDAQ:PET) financial situation, providing context to the Nasdaq compliance issues. The company's market capitalization stands at $43.09 million, falling short of the $50 million MVLS requirement. This aligns with the InvestingPro Tip that the stock price "has fallen significantly over the last year," with a one-year price total return of -53.29%.
Despite these challenges, Wag! Group Co. maintains "impressive gross profit margins" of 79.58% for the last twelve months as of Q2 2024, according to InvestingPro Tips. However, the company is "quickly burning through cash" and is "not profitable over the last twelve months," which may complicate efforts to regain compliance.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Wag! Group Co., providing deeper insights into the company's financial health and market position.
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