8-K/A: Verb Technology Granted Temporary Exception to Avoid Delisting, Plans Potential Reverse Stock Split

Verb Technology Company has received a temporary exception from Nasdaq to avoid delisting, contingent on regaining compliance with the minimum bid price rule, potentially through a reverse stock split.

Summary

• Verb Technology Company received a notice from Nasdaq on November 2, 2023, stating they were not compliant with the minimum bid price rule as their stock price had fallen below $1.00 for 30 consecutive days.
• The company was initially given until April 30, 2024, to regain compliance, which was then extended to October 28, 2024.
• On August 6, 2024, Nasdaq notified Verb that its stock price had fallen below $0.10 for 10 consecutive days, making them subject to potential delisting.
• Verb requested a hearing with the Nasdaq Hearings Panel on August 12, 2024, to appeal the delisting.
• The hearing was scheduled for September 19, 2024, and Verb submitted a plan to regain compliance, including a potential reverse stock split by October 2, 2024.
• Verb intends to seek shareholder approval for a reverse stock split at their annual meeting on September 26, 2024, with a range of 1-for-5 to 1-for-200.
• On August 28, 2024, the Nasdaq Panel granted a temporary exception until October 21, 2024, for Verb to regain compliance, contingent on completing the reverse stock split if necessary.
• Verb is prioritizing other measures to regain compliance but will implement a reverse stock split if necessary by the October 21, 2024 deadline to avoid delisting.

Sentiment

Score: 3

Explanation: The document highlights significant challenges with the company's stock price and potential delisting, despite a temporary reprieve. The need for a reverse stock split is a negative indicator.

Positives

• Verb Technology has been granted a temporary exception by Nasdaq to avoid delisting.
• The company has a plan in place to regain compliance, including a potential reverse stock split.
• The Nasdaq Hearing Panel has acknowledged the company's efforts to regain compliance.

Negatives

• Verb Technology's stock price has fallen below both $1.00 and $0.10, triggering non-compliance notices from Nasdaq.
• The company is facing potential delisting if it does not regain compliance by October 21, 2024.
• A reverse stock split may be necessary to regain compliance, which could negatively impact shareholders.

Risks

• Failure to regain compliance with the minimum bid price rule by October 21, 2024, will result in delisting from Nasdaq.
• The reverse stock split, if implemented, could negatively impact the stock price and shareholder value.
• The company's ability to regain compliance through other measures is uncertain.

Future Outlook

Verb Technology must regain compliance with Nasdaq's minimum bid price rule by October 21, 2024, to avoid delisting, potentially through a reverse stock split.

Management Comments

• The Company prioritizes regaining compliance with the Bid Price Rule through other measures before resorting to a reverse stock split.
• The Company intends, if necessary, to expeditiously implement the reverse stock split to regain compliance with Nasdaq's Bid Price Rule.

Industry Context

This situation is not uncommon for companies experiencing stock price declines, and Nasdaq's delisting rules are designed to maintain market integrity. Other companies in similar situations have used reverse stock splits to regain compliance.

Comparison to Industry Standards

• Many companies facing delisting from major exchanges like Nasdaq or NYSE have used reverse stock splits as a method to increase their share price and regain compliance.
• For example, companies like DryShips Inc. and Gevo Inc. have previously implemented reverse stock splits to avoid delisting.
• The range of the proposed reverse stock split (1-for-5 to 1-for-200) is within the typical range seen in similar situations, although the higher end of the range suggests a significant concern about the current share price.
• The temporary exception granted by the Nasdaq Panel is also a common practice, allowing companies additional time to implement their plans for compliance.

Stakeholder Impact

• Shareholders face the risk of delisting and potential dilution from a reverse stock split.
• Employees may be concerned about the company's future and job security.
• Customers and suppliers may be concerned about the company's long-term viability.

Next Steps

• Verb Technology will seek shareholder approval for a reverse stock split at its annual meeting on September 26, 2024.
• The company will attempt to regain compliance with the minimum bid price rule through other measures before resorting to a reverse stock split.
• If necessary, the company will implement a reverse stock split by October 21, 2024, to avoid delisting.

Key Dates

Keywords

delisting, Nasdaq, minimum bid price, reverse stock split, compliance, hearing, stock price