Cyclo Therapeutics, Inc., a biopharmaceutical company, is facing potential delisting from The Nasdaq Stock Market after failing to comply with several listing rules, according to a recent 8-K filing with the Securities and Exchange Commission. The company, which specializes in the development of biological products, received notification from Nasdaq on Monday, October 4, 2024, indicating non-compliance with the minimum bid price requirement and other financial standards.
Specifically, Cyclo Therapeutics has not maintained the minimum closing bid price of $1.00 per share for 30 consecutive trading days as mandated by Nasdaq Listing Rule 5550(a)(2). Additionally, the firm's stockholders' equity has fallen below the required $2.5 million threshold, and its Market Value of Listed Securities is below the minimum of $35 million.
Furthermore, the company has not met the net income standard from continuing operations, which requires $500,000 in the most recent fiscal year or two of the three most recent fiscal years.
The company, headquartered in Gainesville, Florida, and incorporated in Nevada, has been given 180 calendar days, until April 2, 2025, to address these deficiencies and regain compliance with Nasdaq's requirements. If Cyclo Therapeutics fails to meet the bid price rule within this period, it may be eligible for an additional 180-day grace period, subject to meeting certain conditions.
However, if compliance with the Market Value of Listed Securities rule is not achieved by the deadline, Cyclo Therapeutics could receive a notice of delisting from Nasdaq.
The company, previously known as CTD Holdings Inc and Cyclodextrin Technologies Development Inc, trades under the ticker symbols NASDAQ:CYTH for its common stock and NASDAQ:CYTHW for its warrants to purchase common stock.
The information detailed in this report is based on the company's SEC filing and reflects the latest developments regarding its listing status.
In other recent news, biopharmaceutical firm Cyclo Therapeutics has secured a $3 million convertible promissory note from Rafael Holdings. The note, which carries a 5% annual interest rate, is set to mature in December 2024. The funds are designated for working capital and general corporate purposes.
Additionally, Cyclo Therapeutics and Rafael Holdings have entered into a definitive merger agreement, subject to various conditions and shareholder approvals. The merger would result in Cyclo Therapeutics becoming a wholly-owned subsidiary of Rafael.
Amid these developments, Maxim Group downgraded Cyclo Therapeutics stock from 'Buy' to 'Hold', while Ascendiant Capital maintained its 'Buy' rating but reduced its price target. H.C. Wainwright also downgraded the stock to 'Neutral'.
In terms of research and development, Cyclo Therapeutics reported progress in its ongoing TransportNPC™ study for treating Niemann-Pick Disease Type C1 (NPC1), with interim data expected in the first half of 2025. The company also received approval from the European Patent Office for its Alzheimer's disease treatment method, set to take effect in 2024. These are the latest updates from Cyclo Therapeutics' operations.
InvestingPro Insights
Recent InvestingPro data provides additional context to Cyclo Therapeutics' (NASDAQ:CYTH) current financial situation and market performance. The company's market capitalization stands at a modest $21.81 million, reflecting its small-cap status. Despite the challenges highlighted in the Nasdaq notification, InvestingPro Tips indicate that net income is expected to grow this year, and analysts predict the company will be profitable this year. This could potentially help address some of the listing compliance issues.
However, the company's financial health remains precarious. InvestingPro data shows a significant operating loss with an operating income of -$21.15 million over the last twelve months. The stock has also experienced a substantial decline, with a 46.54% drop in the three-month price total return and a 48.05% decrease over six months. These figures align with the InvestingPro Tip noting that the stock price has fallen significantly over the last three months.
On a positive note, Cyclo Therapeutics boasts impressive gross profit margins of 91.56%, which could be a valuable asset as the company works to improve its financial position. For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips for CYTH, providing a deeper understanding of the company's prospects amidst its current challenges.
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