Seattle-based online cannabis marketplace Leafly Holdings Inc. (Nasdaq: LFLY) has requested a hearing to avoid delisting from the Nasdaq.
In a Monday filing with the Securities and Exchange Commission, Leafly said it first received notice in November from the Nasdaq that it fallen out of compliance with the exchange's listing rules because its stock hadn't maintained a minimum bid price of $1 per share for 30 consecutive business days. The company had 180 calendar days to get its stock price to at least $1 per share for at least 10 consecutive business days but was unable to do so.
Leafly on Monday requested a hearing with the Nasdaq Hearings Panel to acquire an additional 180 calendar days to regain compliance with the minimum bid price rule. The company said it might enact a reverse stock split, in which companies increase their stock price by consolidating shares, creating fewer, more valuable shares.
"We understand that the panel routinely grants additional time for a company to cure a bid price deficiency when the compliance plan demonstrates, like we expect our plan will, that the company will cure a bid price issue through a reverse stock split within 180 days of a delisting notice," Leafly said in the SEC filing. "The request stayed any further action by Nasdaq, and while the hearings process is pending, it is expected that the common stock will continue to be listed and traded on Nasdaq."
Leafly didn't comment on the hearing process beyond the SEC filing. The company will seek shareholder approval for the reverse stock split at its upcoming annual meeting. Leafly aims to submit proxy materials on May 15. Leafly's stock closed at 36 cents per share Tuesday.
Leafly, founded in 2010, allows consumers to research and shop cannabis products online. Cannabis retailers, meanwhile, can boost business through Leafly's website. The company went public in February 2022 through a special purpose acquisition company merger, and Leafly rang the opening bell on the Nasdaq on April 20 last year.
In March, Leafly announced plans to reduce its headcount by about 40 employees, adding to a reduction of 56 employees announced in October. The company generated $47.4 million in revenue last year, up 10% year over year. Its fourth quarter 2022 revenue was $12.1 million, which was flat compared with the same period in 2021.
Multiple companies have faced delisting from the Nasdaq recently for failing to meet the minimum bid price threshold. Seattle-based computer vision company RealNetworks faced delisting last year before going private through an acquisition by an affiliate of founder and CEO Robert Glaser. Seattle-based biotech Atossa Therapeutics in April gained an extension to meet the requirement.
