8-K: Biotricity Inc. Faces Nasdaq Delisting Risk and Completes Second Closing of Private Placement

Biotricity Inc. received a delisting notice from Nasdaq for not holding an annual meeting and completed a second closing of a private placement for $354,545.

Summary

• Biotricity Inc. received a notification from Nasdaq on May 1, 2024, stating the company is not in compliance with listing rule 5620(a) due to not holding an annual stockholder meeting within 12 months of its fiscal year end.
• This notification serves as an additional basis for potential delisting, and the Nasdaq Hearings Panel will consider this matter in their decision regarding the company's continued listing.
• Biotricity is required to present its views on this deficiency to the Panel by May 8, 2024, and intends to hold a stockholder meeting as soon as practicable.
• The company completed a second closing of a private placement on April 30, 2024, issuing 39 shares of Series B Preferred Stock for gross proceeds of $354,545.
• This follows a first closing on March 25, 2024, where 110 shares were issued for $1,000,000.
• The total potential raise from the private placement is $2,000,000, with the second closing bringing the total raised to $1,354,545.
• Biotricity is obligated to seek stockholder approval for the conversion of the Series B Preferred Stock, if required by Nasdaq rules.
• The company must hold a meeting for this purpose within 75 days of when two conversions would require approval, and every three months thereafter until approval is obtained.
• Biotricity also has obligations to file a registration statement with the SEC for the shares issuable upon conversion of the Series B Preferred Stock within specified timeframes.
• Failure to meet these deadlines results in the issuance of 100,000 shares of common stock to the investor for each missed deadline.

Sentiment

Score: 3

Explanation: The document contains negative news regarding a delisting notice and potential penalties, which outweighs the positive news of the second closing of the private placement. The overall sentiment is negative from an investment perspective.

Positives

• The company successfully completed a second closing of a private placement, securing additional funding of $354,545.
• Biotricity intends to hold a stockholder meeting as soon as practicable to address the Nasdaq listing deficiency.

Negatives

• Biotricity received a delisting notice from Nasdaq for not holding an annual meeting within the required timeframe.
• The company faces potential penalties of issuing 100,000 shares of common stock to the investor for each missed deadline related to the registration statement.

Risks

• There is a risk of delisting from the Nasdaq Capital Market if Biotricity does not comply with the listing requirements.
• The company faces potential financial penalties in the form of issuing additional shares if it fails to meet the deadlines for filing and effectiveness of the registration statement.
• The need for stockholder approval for the conversion of preferred stock adds a layer of uncertainty and potential delay.

Future Outlook

Biotricity intends to hold a stockholder meeting as soon as practicable to address the Nasdaq listing deficiency and to seek approval for the conversion of the Series B Preferred Stock. The company is also obligated to file a registration statement with the SEC for the shares issuable upon conversion of the Series B Preferred Stock.

Management Comments

• The Company intends to hold a stockholder meeting as soon as practicable and will provide public notice of such meeting.

Industry Context

The delisting notice highlights the importance of corporate governance and compliance with exchange listing rules. The private placement indicates a need for capital, which is common in the biotech industry. The company's ability to meet the Nasdaq requirements and successfully register the shares will be critical for its future.

Comparison to Industry Standards

• Many biotech companies face challenges in maintaining Nasdaq listing compliance, especially those in early stages of development.
• Private placements are a common method for biotech companies to raise capital, but the terms and conditions can vary significantly.
• The penalties for failing to meet registration deadlines are not uncommon, but the specific terms and amounts can differ.
• Companies like Cassava Sciences (SAVA) and Ocugen (OCGN) have faced similar listing compliance issues, highlighting the challenges in the sector.
• The speed and efficiency of the registration process is often compared to companies like Novavax (NVAX) and Moderna (MRNA) who have successfully navigated the process.

Stakeholder Impact

• Shareholders face the risk of delisting and potential dilution from the issuance of additional shares.
• The company's employees may be affected by the uncertainty surrounding the company's listing status.
• Investors in the private placement are subject to the terms of the purchase agreement and registration rights agreement.

Next Steps

• Biotricity needs to present its views to the Nasdaq Hearings Panel by May 8, 2024.
• The company must hold a stockholder meeting as soon as practicable.
• Biotricity needs to file a registration statement with the SEC for the shares issuable upon conversion of the Series B Preferred Stock.
• The company must obtain stockholder approval for the conversion of the Series B Preferred Stock.

Key Dates

Keywords

delisting, Nasdaq, private placement, Series B Preferred Stock, registration statement, stockholder meeting, conversion shares, securities, investor