8-K: Getaround Inc. to Delist from NYSE, Stockholders Approve Reverse Stock Split

Getaround Inc. will delist from the NYSE after failing to meet listing requirements, while stockholders approved a reverse stock split and other proposals at the annual meeting.

Summary

• Getaround Inc. received notice from the New York Stock Exchange (NYSE) on July 9, 2024, that it would be delisted due to not meeting the minimum average global market capitalization of $15 million over 30 consecutive trading days.
• The company initially appealed the delisting decision on July 23, 2024, but withdrew the appeal on August 2, 2024.
• The NYSE filed a Form 25 with the SEC on August 5, 2024, to delist Getaround's common stock, effective August 16, 2024.
• Getaround's common stock and public warrants are now trading on the OTC Pink Market under the symbols GETR and GETRW, respectively.
• At the Annual Meeting of Stockholders on July 31, 2024, stockholders voted on several proposals.
• Stockholders approved the election of four directors, the ratification of dbb mckennon as the independent auditor, a reverse stock split at a ratio between 1-for-10 and 1-for-50, and the potential issuance of shares upon conversion of convertible notes.
• Proposals to issue shares for inducement grants, amend the equity incentive plan, and reprice stock options were not approved by stockholders.

Sentiment

Score: 3

Explanation: The delisting from the NYSE and the failure to pass key proposals at the annual meeting are significant negative events, indicating a challenging outlook for the company. The approval of the reverse stock split is a minor positive, but not enough to offset the negative news.

Positives

• Stockholders approved the reverse stock split, which could help the company regain compliance with listing requirements in the future.
• The ratification of the independent auditor ensures continued financial oversight.
• The approval for potential share issuance upon conversion of convertible notes provides flexibility for future financing.

Negatives

• The delisting from the NYSE is a significant negative event for the company, potentially reducing investor confidence and liquidity.
• The failure to get approval for the inducement grant share issuance, equity incentive plan amendment, and stock option repricing may hinder the company's ability to attract and retain talent.
• The company's stock is now trading on the OTC Pink Market, which is generally considered less prestigious and less liquid than the NYSE.

Risks

• The delisting from the NYSE could lead to decreased trading volume and lower stock prices.
• The company may face challenges in raising capital due to its delisted status.
• The failure to approve certain proposals may impact the company's ability to incentivize employees and manage its capital structure effectively.
• The reverse stock split, while approved, could be perceived negatively by investors if not accompanied by improvements in the company's performance.

Future Outlook

The company will now trade on the OTC Pink Market and will need to focus on improving its financial performance and potentially regaining compliance with listing requirements in the future. The reverse stock split may be a step in that direction.

Management Comments

• The company notified NYSE that it determined to officially withdraw its request for a hearing.

Industry Context

The delisting of Getaround highlights the challenges faced by companies in the competitive car-sharing market, particularly those that have struggled to achieve profitability and maintain market capitalization. This event may cause investors to be more cautious about investing in similar companies.

Comparison to Industry Standards

• The delisting of Getaround from the NYSE is a significant negative event, as most established car-sharing companies are listed on major exchanges.
• Companies like Turo, a competitor in the peer-to-peer car sharing space, are not publicly listed, making direct comparisons difficult, but they are generally considered to be in a stronger financial position.
• Traditional car rental companies like Avis and Hertz, while facing their own challenges, maintain listings on major exchanges and have significantly larger market capitalizations.

Stakeholder Impact

• Shareholders will likely experience a decrease in the value of their holdings due to the delisting and move to the OTC Pink Market.
• Employees may be concerned about the company's future prospects and job security.
• Customers may not be directly impacted, but the company's financial instability could affect service quality in the long term.
• Creditors may be more cautious about extending credit to the company due to its delisted status.

Next Steps

• The company will begin trading on the OTC Pink Market.
• The company will implement the reverse stock split at a ratio to be determined by the Board.
• The company will need to focus on improving its financial performance and potentially regaining compliance with listing requirements in the future.

Key Dates

Keywords

delisting, reverse stock split, NYSE, OTC Pink Market, stockholders meeting, convertible notes, equity incentive plan, stock options, dbb mckennon, corporate governance