8-K: Nuwellis Faces Nasdaq Delisting Threat Over Sub-$1.00 Share Price, Plans Reverse Stock Split to Regain Compliance

Nuwellis, Inc. received a delisting notice from Nasdaq due to its common stock trading below $1.00 for 30 consecutive days and plans to effect a reverse stock split to regain compliance.

Summary

• Nuwellis, Inc. (the "Company") received a Deficiency Notice from the Nasdaq Stock Market on June 18, 2025.
• The notice informed the Company that it is not in compliance with Nasdaq Marketplace Rule 5550(a)(2), which requires a minimum bid price of $1.00, as its common stock traded below this threshold for 30 consecutive trading days.
• The Company is not eligible for the standard compliance period specified in Nasdaq Listing Rule 5810(c)(3)(A) because it effected a reverse stock split over the prior one-year period (June 27, 2024) or multiple reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one.
• Consequently, the Company's securities are subject to delisting from Nasdaq unless it timely requests a hearing before the Nasdaq Hearings Panel.
• At its annual meeting on May 20, 2025, stockholders approved a proposal allowing the board of directors to effect a reverse stock split in the range of 1-for-5 to 1-for-70.
• The Company intends to timely submit a request for a hearing and its board of directors intends to effect a reverse stock split in the near term to regain compliance with the Minimum Bid Price Requirement.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the receipt of a delisting notice and the immediate threat of delisting without a standard compliance period. While the company has a plan (reverse split, hearing), the outcome is uncertain, indicating significant risk.

Positives

• The Company intends to timely submit a request for a hearing before the Nasdaq Hearings Panel, which will keep its securities listed and eligible for trading during the hearing process.
• Stockholders approved a proposal on May 20, 2025, allowing the board to effect a reverse stock split (1-for-5 to 1-for-70), providing a mechanism to potentially regain compliance.
• The board of directors intends to effect a reverse stock split in the near term to address the minimum bid price requirement.

Negatives

• Nuwellis received a Deficiency Notice from Nasdaq for failing to meet the minimum bid price requirement of $1.00 for 30 consecutive trading days.
• The Company is not eligible for the standard compliance period due to previous reverse stock splits (including one on June 27, 2024) with a cumulative ratio of 250 shares or more to one.
• The Company's securities are subject to delisting from Nasdaq unless a hearing is successfully requested and compliance is regained.

Risks

• There is no assurance that the Nasdaq Hearings Panel will grant the Company's request for continued listing.
• There is no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement.
• There is no assurance that the Company will be able to thereafter maintain its listing on Nasdaq.

Future Outlook

Nuwellis intends to timely request a hearing with the Nasdaq Hearings Panel and its board of directors plans to effect a reverse stock split in the near term to regain compliance with Nasdaq's minimum bid price requirement. However, there is no guarantee that the Panel will grant continued listing or that the Company will successfully regain and maintain compliance.

Management Comments

• The Company's board of directors intends to effect a reverse stock split in the near term in order to regain compliance with the Minimum Bid Price Requirement.
• The Company intends to timely submit a request for a hearing and the Company's securities will then remain listed and eligible for trading on the Nasdaq Capital Market at least pending the ultimate conclusion of any hearing process.

Industry Context

Companies listed on major exchanges like Nasdaq are subject to strict listing requirements, including minimum bid prices. Failure to meet these often leads to delisting notices, particularly for smaller-cap companies. Reverse stock splits are a common, though often temporary, strategy employed by companies to increase their share price and regain compliance, but they do not fundamentally change the company's market capitalization or underlying value.

Corporate Governance

Legal Proceedings

• The Company will engage in a hearing process before the Nasdaq Hearings Panel to appeal the delisting notice and present its plan for regaining compliance.

Stakeholder Impact

• Shareholders face potential dilution from a reverse stock split (though not directly, it reduces the number of shares outstanding, increasing per-share price) and the risk of the stock being delisted from Nasdaq, which could significantly impact liquidity and investor confidence.
• Employees may face uncertainty regarding the company's future listing status and financial stability.

Next Steps

• Nuwellis, Inc. will timely submit a request for a hearing before the Nasdaq Hearings Panel.
• The Company's board of directors intends to effect a reverse stock split in the near term.

Key Dates

Recommendation

Keywords

Nuwellis, NUWE, Nasdaq, delisting, minimum bid price, reverse stock split, SEC filing, 8-K, corporate governance, stock market compliance