Dogwood Therapeutics, Inc., a pharmaceutical company, has been notified by Nasdaq that its stockholders' equity falls short of the exchange's minimum requirement, putting its listing at risk. The notice, received on November 15, 2024, indicates that the company's equity is below the required $2.5 million threshold according to Nasdaq Listing Rule 5550(b)(1), based on the September 30, 2024, Quarterly Report.
The shortfall in equity occurred despite the company's recent acquisition of Pharmagesic (Holdings) Inc. on October 7, 2024. The notification also pointed out that Dogwood Therapeutics does not meet alternative compliance standards related to the market value of listed securities or net income from continuing operations.
Dogwood Therapeutics' common stock continues to trade on the Nasdaq Capital Market as the notice does not immediately impact its listing status. The company has until December 30, 2024, to submit a compliance plan to Nasdaq. If the plan is accepted, Nasdaq could grant up to 180 days for Dogwood to demonstrate compliance. In the event of non-acceptance, the company can appeal to a Nasdaq Hearings Panel.
The company has expressed confidence in its ability to regain compliance and intends to submit a plan within the required timeframe. However, there is no guarantee that Nasdaq will accept the compliance plan or that Dogwood Therapeutics will be able to meet the listing rule in the future.
In other recent news, Dogwood Therapeutics, previously known as Virios Therapeutics, has announced its compliance with Nasdaq's minimum bid price requirement. This development follows the company's merger with Wex Pharmaceuticals and Sealbond Limited, both affiliates of CK Life Sciences. The merger has led to the advancement of three primary assets: Halneuron®, IMC-1, and IMC-2. In response to these developments, H.C. Wainwright adjusted its stock price target for the company.
The company is expecting to release top-line results from a phase 2a study of its drug candidate IMC-2 for the treatment of Long-COVID soon. Moreover, interim data from a Phase 2 study on chemotherapy-induced neuropathic pain (CINP) using Halneuron®, is anticipated in the second half of 2025.
InvestingPro Insights
Recent InvestingPro data paints a challenging picture for Dogwood Therapeutics, aligning with the company's Nasdaq listing concerns. The company's market capitalization stands at a mere $3.24 million, precariously close to the $2.5 million stockholders' equity threshold required by Nasdaq. This low valuation is reflected in the stock's performance, with InvestingPro data showing a staggering 85.75% price decline over the past year and an 83.1% drop year-to-date.
Two key InvestingPro Tips shed light on Dogwood's financial situation. Firstly, the company "holds more cash than debt on its balance sheet," which could be a positive factor in its efforts to regain compliance. However, the tip that Dogwood "suffers from weak gross profit margins" underscores the operational challenges it faces.
These insights, along with 11 additional tips available on InvestingPro, provide a comprehensive view of Dogwood's financial health and market position. For investors closely following Dogwood's compliance efforts, InvestingPro offers valuable data to inform decision-making during this critical period.
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