micromobility.com Inc. to Address Nasdaq Delisting Notice; Postpones Special Meeting and Withdraws Reverse Split Request
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- The delisting and cessation of trading on Nasdaq could have a material adverse effect on the liquidity and trading price of its common shares.
The suspension of micromobility.com Inc.'s trading on Nasdaq due to non-compliance with Listing Rules and the subsequent move to an over-the-counter (OTC) market is a significant development. This transition could lead to reduced liquidity and trading volume, which often results in wider bid-ask spreads and potentially lower stock prices. Investors should be aware that OTC markets are generally considered less prestigious and may attract fewer institutional investors, potentially impacting the stock's visibility and attractiveness.
Furthermore, while the company may benefit from cost savings due to reduced compliance and governance expenses, these must be weighed against the potential loss of investor confidence. The cost of compliance, including SOX and ESG initiatives, can indeed be substantial, but they also serve as a quality signal to investors. The delisting could be perceived as a negative signal about the company's financial health or long-term prospects.
Shareholders should closely monitor the company's future strategy and operational performance, as well as its ability to maintain transparency and good corporate governance practices even after delisting. The company's ability to appeal the delisting decision and possibly reverse it could also be a critical factor in the near term.
The compliance costs associated with listing on a major exchange like Nasdaq are considerable, but they provide a framework for corporate governance and investor protection. Micromobility.com Inc.'s decision to consider delisting must be seen in light of the Sarbanes-Oxley Act's requirements, which aim to protect shareholders from fraudulent financial reporting. The company's anticipation of cost savings may allow for more operational flexibility, but it also removes the stringent checks and balances that come with a Nasdaq listing.
For current and potential investors, the shift to the OTC market means they must exercise greater due diligence. The OTC market's regulatory requirements are less stringent than those of Nasdaq, which could increase the risk profile of the investment. However, the company's commitment to continue SEC reporting is a positive aspect, as it maintains a level of transparency.
Investors should also consider the impact of delisting on the company's brand reputation and its ability to raise capital in the future. While the OTC market offers a trading platform, it may not provide the same level of exposure to a diverse investor base, which could be critical for future growth and funding opportunities.
From an investment strategy perspective, the delisting of micromobility.com Inc. from Nasdaq is a pivotal event that requires careful consideration. The potential appeal process, if pursued by the company, could offer a temporary reprieve, but investors must prepare for the long-term implications of trading on an OTC market. The company's efforts to maintain a trading market and provide information to its shareholders are commendable, yet the move to OTC is typically associated with a 'downgrade' in the eyes of the market.
Investors should assess the company's operational strategy and the effectiveness of its cost-saving measures in the context of its overall financial health. While delisting may alleviate some financial pressure, it does not address underlying business performance issues. The ability of the company to innovate and compete in the urban transportation solutions market will continue to be the driving force behind its stock value.
It is crucial for investors to track the company's progress in streamlining operations and to analyze the trade-offs between the cost savings from delisting and the potential benefits of remaining on a major exchange. Long-term effects on stockholder value, market perception and the company's strategic positioning in its industry are key factors to watch.
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The Special Meeting was postponed allowing the board of directors of the Company to continue to assess its corporate governance and operational strategy going forward. Thus, Company stockholders do not need to take any action at this time.
The Delisting Letter was due to the fact that the Company’s common stock did not maintain a minimum closing bid price of
The Delisting Letter provides that the Company may request the Nasdaq Listing and Hearing Review Council to review the delisting decision within 15 days from the date of the Delisting Letter. The Company is currently carefully evaluating whether such an appeal of Nasdaq’s decision is warranted. The Company’s evaluation will consider various factors, including the board’s assessment of the likelihood of the Company regaining and maintaining compliance with the continued listing requirements. Additionally, the evaluation will encompass an analysis of the benefits of continuing to list on Nasdaq compared to the substantial costs, including the extensive commitment of management’s time and resources for complying with various listing requirements.
The Company estimates that its expenses related to maintaining its Nasdaq listing are expected to rise significantly in the coming years due to the compliance requirements of the Sarbanes-Oxley Act (SOX) and ESG initiatives, among others. In anticipation of realizing substantial cost savings, the Company sees potential opportunities to streamline operations through delisting and deregistration. These benefits include lower operating costs, reduced management time commitment to compliance and reporting activities, and a simplified corporate governance structure. The decision to appeal Nasdaq’s decision will be consistent with the Company’s previously announced cost-saving measures. The Company acknowledges that the delisting and cessation of trading on Nasdaq could have a material adverse effect on the liquidity and trading price of its common shares.
The Company has initiated the process of transferring the quotation of its common stock and warrants to one of the over-the-counter markets operated by OTC Markets Group Inc. The shares of the Company's common stock and warrants will continue to trade under the symbols "MCOM" and “MCOMW.” It is expected that the stock will initially be quoted and traded on the Pink Current Information tier concurrent with the trading suspension.
The transition to the OTC markets will not alter the Company's commitment to continue business operations as usual. The Company will remain subject to the public reporting requirements of the SEC post-transfer. The Company intends to continue providing information to its stockholders and taking actions within its control to facilitate the quoting of its common stock and warrants in the OTC market, thereby to facilitate ensuring the existence of a trading market for its common stock and warrants.
About micromobility.com Inc.
micromobility.com Inc., a disruptive leader in the micromobility sector, founded by Salvatore Palella in 2015, combines expertise in retail, shared services, and vehicle rentals to revolutionize urban transportation. With operations spanning across the US and
Forward-Looking Statements
Certain statements made in this press release are "forward-looking statements'' within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "anticipate," "believe," "expect," "estimate," "plan," "outlook," and "project" and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements reflect the current analysis of existing information and are subject to various risks and uncertainties. As a result, caution must be exercised in relying on forward looking statements. Due to known and unknown risks, actual results may differ materially from the Company’s expectations or projections. The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: (i) the failure to meet projected development and production targets; (ii) changes in applicable laws or regulations; and (iii) other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in other reports and other public filings with the Securities and Exchange Commission (the "SEC") by the Company including its Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The Company’s SEC filings are available publicly on the SEC’s website at www.sec.gov. Any forward-looking statement made by us in this press release is based only on information currently available to the Company and speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by law.
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Source: micromobility.com Inc.
