8-K: Breeze Holdings Faces Delisting from OTCQX Market Due to Non-Compliance

Breeze Holdings Acquisition Corp. received notice of non-compliance with OTCQX listing requirements and faces potential delisting unless the deficiency is cured by June 13, 2025.

Summary

• Breeze Holdings Acquisition Corp. received a notice from the OTC Markets Group on March 17, 2025, stating the company is not in compliance with Section 2 of the OTCQX Rules for U.S. Companies.
• The company does not meet the requirements for continued qualification, specifically Section 1.1(A) of the OTCQX Eligibility Criteria.
• To meet this criteria, the company needs to have (1) net tangible assets of $2,000,000 (if operating for at least three years) or $5,000,000 (if operating for less than three years), (2) average revenue of at least $6,000,000 for the last three years, or (3) a bid price of $5 per share for 30 consecutive days and meet certain financial thresholds at the most recent fiscal year end.
• Unless the company cures this deficiency by June 13, 2025, its common stock (BRZH) and warrants (BRZHW) will be moved from the OTCQX market.
• The company is pursuing a business combination with YD Biopharma Limited, expected to close before June 13, 2025.
• A condition of the business combination is the combined company's listing on the NASDAQ Capital Markets.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the delisting notice, but there's a potential positive outcome with the planned business combination and NASDAQ listing.

Positives

• The company is actively pursuing a business combination with YD Biopharma Limited.
• The business combination includes a condition that the combined company will be listed on the NASDAQ Capital Markets, which could resolve the delisting issue.

Negatives

• The company is currently not in compliance with OTCQX listing requirements.
• The company faces potential delisting of its common stock and warrants if the deficiency is not cured by June 13, 2025.

Risks

• Failure to complete the business combination with YD Biopharma Limited before June 13, 2025, could result in delisting from the OTCQX market.
• The company may not be able to meet the OTCQX Eligibility Criteria independently if the business combination is delayed or terminated.
• There is no guarantee that the NASDAQ will approve the listing of the combined company.

Future Outlook

The company expects to close a business combination with YD Biopharma Limited prior to June 13, 2025, and as a condition of that business combination, the combined company is required to be listed on the NASDAQ Capital Markets as of the closing date.

Management Comments

• J. Douglas Ramsey, Chief Executive Officer and Chief Financial Officer, signed the report on behalf of Breeze Holdings Acquisition Corp.

Industry Context

Many SPACs (Special Purpose Acquisition Companies) like Breeze Holdings have faced challenges in finding suitable merger targets and maintaining listing compliance, especially in a volatile market environment. The focus on completing the business combination and securing a NASDAQ listing reflects a common strategy to enhance shareholder value and access broader capital markets.

Comparison to Industry Standards

• Many SPACs struggle to maintain the minimum listing requirements of exchanges like NASDAQ and OTCQX, especially after the initial hype subsides.
• Companies like Digital World Acquisition Corp. (DWAC), which aimed to merge with Trump Media & Technology Group, have faced similar listing challenges and scrutiny.
• The requirement to have a minimum bid price of $5 per share is a common hurdle for smaller companies, as seen with companies like Farmmi, Inc. (FAMI) which has faced delisting warnings due to low share prices.
• The focus on NASDAQ listing post-merger is a common goal, as it provides greater visibility and access to institutional investors, similar to how companies like Virgin Galactic (SPCE) benefited from their NASDAQ listing after their SPAC merger.

Stakeholder Impact

• Shareholders face the risk of delisting, which could negatively impact the value of their holdings.
• Employees may experience uncertainty due to the company's financial situation and potential changes following the business combination.
• The company's creditors may be concerned about the company's ability to meet its financial obligations if delisting occurs.

Next Steps

• Complete the business combination with YD Biopharma Limited.
• Secure listing on the NASDAQ Capital Markets.
• Cure the deficiency identified by the OTC Markets Group before June 13, 2025.

Key Dates