8-K: MacKenzie Realty Capital Faces Nasdaq Delisting Threat, Plans 1-for-10 Reverse Stock Split

MacKenzie Realty Capital, Inc. received a Nasdaq bid price deficiency notice and announced plans for a 1-for-10 reverse stock split to regain compliance and maintain its listing.

Summary

• MacKenzie Realty Capital, Inc. (the Company) received a Bid Price Deficiency Notice from The Nasdaq Stock Market on July 7, 2025, indicating non-compliance with the $1.00 minimum bid price requirement (Nasdaq Listing Rule 5550(a)(2)).
• The notice does not immediately affect the listing of the Company's common stock, which continues to trade on the Nasdaq Capital Market under the symbol MKZR.
• The Company has 180 calendar days, until January 5, 2026, to regain compliance by having its common stock's closing bid price meet or exceed $1.00 for a minimum of ten consecutive business days.
• If compliance is not regained by January 5, 2026, the Company may be eligible for an additional 180-day compliance period if it meets other listing requirements and notifies Nasdaq of its intent to cure the deficiency, potentially through a reverse stock split.
• The Company's Board of Directors approved a 1-for-10 reverse stock split on July 3, 2025, with the intention of rectifying the bid price deficiency and maintaining its Nasdaq listing.
• The reverse stock split would reduce the number of outstanding common shares from 15,781,929.80 to approximately 1,578,192 shares.
• No fractional shares will be issued; stockholders entitled to a fractional share will receive cash equal to the applicable fraction multiplied by the closing price immediately prior to the split.
• Proportional adjustments will be made to the exercise prices of MacKenzie's outstanding stock warrants.
• A press release announcing the reverse stock split was issued on July 9, 2025.

Sentiment

Score: 4

Explanation: The company received a negative notice regarding its listing compliance, which is a significant concern. However, the proactive and immediate announcement of a board-approved plan (reverse stock split) to address the issue mitigates some of the negative sentiment, indicating management is taking steps to resolve the problem.

Positives

• The Company has a clear, board-approved plan (1-for-10 reverse stock split) to address the Nasdaq bid price deficiency.
• The Company's common stock continues to trade on the Nasdaq Capital Market without immediate effect from the deficiency notice.
• The Company has paid a dividend every year since its inception in 2013, indicating a history of returning value to shareholders.
• Management is actively monitoring the situation and exercising diligent efforts to maintain the Nasdaq listing.

Negatives

• The Company received a formal Bid Price Deficiency Notice from Nasdaq for failing to meet the $1.00 minimum bid price requirement.
• There is a risk of delisting from The Nasdaq Capital Market if the Company fails to regain compliance within the specified periods.
• The effective date of the planned reverse stock split has not yet been determined, and the split has not yet occurred.

Risks

• Failure to regain compliance with the Nasdaq $1.00 minimum bid price requirement, which could lead to the delisting of the common stock.
• No assurance that the Company will be able to regain or maintain compliance with Nasdaq listing standards, even with the planned reverse stock split.
• The planned reverse stock split, while approved, has not yet been effected, and its ultimate success in maintaining the listing is not guaranteed.

Future Outlook

The Company intends to actively monitor its common stock's closing bid price and pursue measures to rectify the deficiency, including the planned 1-for-10 reverse stock split. While diligent efforts are being made, there is no assurance that the Company will regain or maintain Nasdaq listing compliance.

Management Comments

• "The Company intends to actively monitor the closing bid price of the Companys common stock between now and January 5, 2026, and the Company intends to pursue measures to rectify the Bid Price Requirement deficiency, and is currently planning to effect a 10 for 1 reverse stock split, as approved by the Companys Board of Directors on July 3, 2025, in order to rectify the Bid Price Requirement deficiency and maintain its listing on the Nasdaq Capital Market."
• "While the Company is exercising diligent efforts to maintain the listing of its common stock on Nasdaq, including the potential effect of a reverse stock split, there can be no assurance that the Company will be able to regain or maintain compliance with Nasdaq listing standards."

Industry Context

The announcement highlights the strict listing requirements of major stock exchanges like Nasdaq, particularly the minimum bid price rule, which is common across many exchanges to ensure market integrity and investor confidence. Companies in various sectors, including REITs, must maintain these standards to avoid delisting, often resorting to measures like reverse stock splits to boost per-share price.

Corporate Governance

Stakeholder Impact

• Shareholders: Face potential delisting risk, which could severely impact liquidity and valuation. The reverse stock split will reduce the number of shares held but proportionally increase the per-share price, with cash paid for fractional shares.
• Employees: No direct impact mentioned, but delisting could affect company stability and future prospects.
• Customers/Suppliers: No direct impact mentioned.
• Creditors: No direct impact mentioned.

Next Steps

• Actively monitor the closing bid price of the common stock.
• Effect the 1-for-10 reverse stock split.
• Regain compliance with the Nasdaq $1.00 minimum bid price requirement by January 5, 2026.
• If necessary, qualify for an additional 180-day compliance period by meeting other listing standards and notifying Nasdaq of intent to cure via reverse stock split.
• Potentially appeal a delisting determination to a Hearings Panel if compliance is not regained.

Key Dates

Recommendation

Keywords

Nasdaq, delisting, reverse stock split, bid price deficiency, REIT, MacKenzie Realty Capital, MKZR, compliance, stock market, real estate