Akoustis Technologies, Inc. (NASDAQ:AKTS), a manufacturer of telephone and telegraph apparatus, has received an extension from the Nasdaq Hearings Panel to continue its listing on The Nasdaq Capital Market. This decision, dated Monday, October 14, 2024, comes after the company faced potential delisting due to non-compliance with the Nasdaq's minimum bid price and stockholders' equity requirements.
The company's common stock had closed at or below $0.10 for 10 consecutive trading days ending August 16, 2024, prompting a delisting notice. Additionally, Akoustis reported a stockholders' deficit in its Annual Report for the period ending June 30, 2024, which did not meet the Nasdaq's minimum stockholders' equity threshold.
To address these issues, Akoustis appealed the delisting decision and presented a compliance plan at a hearing on October 8, 2024. The granted extension is contingent on the company demonstrating compliance with the minimum bid price requirement by December 17, 2024, and providing an update on its plan to meet the stockholders' equity requirement by January 31, 2025.
In efforts to regain compliance, Akoustis is considering a reverse stock split, subject to stockholder approval at its annual meeting scheduled for November 21, 2024. The proposed reverse stock split would be executed at a ratio between 1-for-50 and 1-for-250, as determined by the board of directors.
Despite these measures, the company has indicated that there is no guarantee of regaining compliance with the Nasdaq's requirements within the given timeframe. The forward-looking statements made by the company highlight the risks associated with these compliance efforts, including the possibility of failing to meet the Nasdaq's continued listing standards.
In other recent news, Akoustis Technologies is grappling with significant challenges and developments on multiple fronts. The company faces possible delisting from the Nasdaq Capital Market due to non-compliance with the minimum stockholders’ equity requirement, with a deficit of approximately $57.1 million. In addition, legal setbacks involving trade secret misappropriation and patent infringement have resulted in damages awarded to rival Qorvo (NASDAQ:QRVO) Inc. totaling approximately $38.6 million, plus an additional $11.7 million in attorneys' fees.
Despite these challenges, Akoustis Technologies has reported positive financial results with a 7% increase in Q3 FY2024 revenues, totaling $7.5 million. The company also secured a series of orders for its high-band RF filters, including a $13 million order for XBAW® filters for Wi-Fi Access Points.
In response to these developments, B.Riley has maintained a Neutral rating for Akoustis Technologies. Furthermore, the company has appointed Kamran Cheema as its new Chief Executive Officer and board member. In an effort to manage its financial situation, Akoustis launched a direct stock offering of 50 million shares, managed by Roth Capital Partners.
InvestingPro Insights
Recent InvestingPro data paints a challenging picture for Akoustis Technologies (NASDAQ:AKTS), aligning with the company's struggle to maintain its Nasdaq listing. The company's market capitalization has dwindled to just $9.94 million, reflecting the severe stock price decline mentioned in the article. This is further evidenced by the stock's significant underperformance, with a one-year price total return of -90.05% and a year-to-date return of -91.06% as of the latest data.
InvestingPro Tips highlight that AKTS "operates with a significant debt burden" and "may have trouble making interest payments on debt," which could complicate its efforts to improve its financial position and meet Nasdaq's stockholders' equity requirement. Additionally, the tip noting that "short-term obligations exceed liquid assets" underscores the urgency of the company's financial situation as it works towards compliance.
On a slightly positive note, analysts anticipate sales growth in the current year, which could potentially aid Akoustis in its recovery efforts. However, with the stock price at just 5.43% of its 52-week high, the company faces a steep climb to meet the minimum bid price requirement by the December 17, 2024 deadline.
For investors considering Akoustis's situation, InvestingPro offers 18 additional tips that could provide further insights into the company's challenges and potential. These tips, along with real-time financial metrics, are available to InvestingPro subscribers, offering a more comprehensive view of AKTS's financial health and market position.
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