Elevai Labs Inc. (NASDAQ:ELAB), a pharmaceutical company based in Newport Beach, California, has been granted an extension by the Nasdaq Stock Market to regain compliance with its minimum bid price requirement, according to a recent 8-K filing with the Securities and Exchange Commission.
The Nasdaq Listing Qualifications Staff had previously notified Elevai Labs on March 6, 2024, that its common stock did not meet the minimum closing bid price of $1.00 per share over 30 consecutive business days as required by Nasdaq Listing Rule 5550(a)(2), known as the Bid Price Rule. The company was given until September 3, 2024, to address this deficiency but was unable to do so within the initial 180-day period.
On September 4, 2024, Nasdaq issued a delisting notice to Elevai Labs due to non-compliance with the Bid Price Rule. The company appealed the decision and presented a comprehensive compliance plan to a Nasdaq Hearings Panel on October 22, 2024.
The plan included raising $8 million through a public offering, obtaining shareholder approval for a reverse stock split, filing a tender offer, and implementing the reverse split after the tender offer's completion.
Nasdaq responded on November 7, 2024, with a Decision Letter granting Elevai Labs an extension to cure the Bid Price Deficiency. The conditions set by Nasdaq require the company to complete a reverse stock split by December 26, 2024, and to demonstrate compliance with the Bid Price Rule by January 9, 2025.
Elevai Labs is expected to keep Nasdaq informed of any significant events during this period that may affect its ability to meet the exchange's requirements.
The company has the option to request a further review of the Panel's decision by the Nasdaq Listing and Hearing Review Council by November 22, 2024, which would involve a review fee of $15,000. The Council may choose to review the Panel's decision by December 22, 2024.
This extension provides Elevai Labs with an opportunity to continue trading on the Nasdaq Stock Market while it works to meet the exchange's listing standards. The company's management and legal team are actively pursuing the necessary steps to achieve compliance within the given timeframe.
In other recent news, Elevai Labs has been making significant strides in obesity treatment and skin care product development.
The company has entered into new executive agreements with key executives and has also signed a Master Services Agreement with KCRN Research, Inc. to support the development of its obesity and muscle loss treatment, EL-22. Elevai Labs has also reported promising preclinical findings for its experimental drug EL-32, which may enhance muscle preservation and fat loss in obesity treatments.
In addition, the company has filed two patent applications for its lead candidate, EL-22.
The pharmaceutical company has also modified its license agreement with INmune Bio (NASDAQ:INMB) Inc., secured a $200,000 unsecured credit line from NorthStrive Fund II LLP, and announced the formation of two wholly owned subsidiaries.
Lasty, Elevai Labs has acquired exclusive licensing rights for two novel drug candidates from South Korean company MOA Life Plus Co., Ltd. These are the recent developments from Elevai Labs.
InvestingPro Insights
Elevai Labs Inc.'s current financial situation reflects the challenges highlighted in the article. According to InvestingPro data, the company's market capitalization stands at a mere $0.93 million, with its stock price at $0.02 as of the previous close. This aligns with the Nasdaq's concerns about the company's minimum bid price requirement.
InvestingPro Tips indicate that Elevai Labs is "trading at a low Price / Book multiple" of 0.35, which could be attractive to value investors if the company manages to regain compliance and stabilize its operations. However, the tip that the company is "quickly burning through cash" underscores the urgency of its $8 million public offering plan mentioned in the article.
The company's financial health is further illuminated by its impressive gross profit margin of 69.25% for the last twelve months as of Q2 2024. This strength in gross profitability could be a positive factor in Elevai Labs' efforts to attract investors and execute its compliance plan.
For investors considering Elevai Labs, it's worth noting that InvestingPro offers 11 additional tips that could provide further insights into the company's situation and prospects.
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