ShiftPixy, Inc., a Miami-based employment agency, has been notified by The Nasdaq Stock Market LLC of a potential delisting due to non-compliance with the minimum publicly held shares requirement. The company, which is listed under the ticker NASDAQ:PIXY, was informed on Wednesday that it does not meet the Nasdaq Capital Market's requirement of having at least 500,000 publicly held shares.
The notice from Nasdaq's Listing Qualifications Department serves as an additional basis for the possible delisting of the company's securities. ShiftPixy has been given the opportunity to present its case at a Nasdaq Hearings Panel scheduled for Thursday. The company's response to the deficiency will be considered by the Panel, which will then make a determination on ShiftPixy's continued listing on the exchange.
ShiftPixy, which operates under the industrial classification of employment agencies, is incorporated in Wyoming and has its fiscal year end on August 31. The company's principal executive offices are located at 4101 NW 25th Street, Miami, FL 33142.
The outcome of the Panel hearing could have significant implications for the company's stock market listing and its investors. ShiftPixy has not yet publicly detailed any plans or actions it intends to take to address the share shortfall and regain compliance with Nasdaq's listing rules.
In other recent news, ShiftPixy's stockholders have approved proposals to amend the company's warrant agreement and increase its authorized shares. The Miami-based employment agency has also declared a reverse stock split of its common stock, aimed at consolidating the company's shares. CEO Scott Absher has been granted a conditional option to acquire over 5 million shares of Preferred Class A Stock, contingent upon the reverse stock split.
ShiftPixy is also facing potential delisting from Nasdaq due to a market value shortfall. The company plans to request a hearing before the Nasdaq Hearing Panel, temporarily halting the delisting process while exploring compliance options. In addition, ShiftPixy announced a securities offering facilitated by A.G.P./Alliance Global Partners (NYSE:GLP), which could potentially raise about $2.5 million. The offering includes over 2.4 million common shares and series A and B warrants.
These are recent developments that investors should be aware of. It's worth noting that the increase in authorized shares could provide ShiftPixy with the flexibility to issue more stock for various purposes, such as raising capital, making acquisitions, or incentivizing employees.
However, these are the facts as they stand and should not be interpreted as a prediction of the company's future performance.
InvestingPro Insights
The potential delisting of ShiftPixy (NASDAQ:PIXY) from the Nasdaq Capital Market is further compounded by the company's challenging financial situation. According to InvestingPro data, ShiftPixy's market capitalization has dwindled to just $3.13 million, reflecting the severe decline in its stock price. The company's shares have experienced a dramatic 96.68% drop over the past year, with a 64.3% decline in the last month alone.
InvestingPro Tips highlight that ShiftPixy is quickly burning through cash and its short-term obligations exceed liquid assets, which could exacerbate its compliance issues with Nasdaq. The company's financial health is further strained by weak gross profit margins, standing at just 3.88% for the last twelve months as of Q3 2024, and an alarming operating income margin of -195.43% for the same period.
These financial metrics underscore the challenges ShiftPixy faces beyond its listing requirements. Investors considering the company's future should note that InvestingPro offers 17 additional tips for PIXY, providing a more comprehensive analysis of the company's situation.
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