Heramba Electric plc Announces Receipt of Notice from Nasdaq Regarding the Minimum Market Value Requirement

Rhea-AI Summary

Heramba Electric plc (NASDAQ:PITA) has received a notification from Nasdaq indicating non-compliance with the minimum Market Value of Listed Securities (MVLS) requirement of $35 million. The company has been granted a 180-day compliance period until September 17, 2025 to regain compliance by maintaining an MVLS of $35 million or more for at least ten consecutive business days.

This notice follows earlier challenges, including a delinquency notification received on March 17, 2025, regarding non-compliance with the minimum bid price requirement of $1.00 per share. Additionally, the company's subsidiary Heramba filed for insolvency proceedings on January 30, 2025, following payment demands of approximately EUR 24,855,000 from KB GmbH related to a previous Share Purchase Agreement.

Positive

• 180-day grace period granted by Nasdaq to regain compliance

Negative

• Non-compliance with Nasdaq's minimum market value requirement of $35 million
• Stock trading below $1.00 for 30 consecutive business days
• Subsidiary Heramba filed for insolvency
• Outstanding payment demands of EUR 24.86 million
• Risk of potential Nasdaq delisting

Insights

Financial Analyst

Heramba Electric's Nasdaq compliance issues represent significant regulatory challenges that threaten the company's listing status and reflect deeper financial concerns. The notification regarding failure to maintain the minimum Market Value of Listed Securities (MVLS) of $35 million comes shortly after a similar notice about non-compliance with the minimum bid price requirement of $1.00.

The dual compliance failures create a compounded regulatory challenge with a narrow window for correction. The company must now address both issues within their respective timeframes - until September 8, 2025 for the bid price requirement and September 17, 2025 for the MVLS requirement.

More concerning is the context surrounding these notices. The German subsidiary Heramba filed for insolvency on January 30, 2025, following unresolved payment demands of approximately EUR 24,855,000 from KB GmbH related to a previous acquisition. This insolvency filing suggests severe financial distress within a key subsidiary.

With the current market cap of only $11.3 million and share price of $0.246, Heramba faces an uphill battle to meet Nasdaq's requirements. The company would need to more than triple its market value to regain compliance - a significant challenge given the subsidiary's insolvency proceedings and the unresolved financial dispute. These compliance issues could severely restrict the company's access to capital and potentially lead to delisting if not resolved within the specified timeframes.

Corporate Governance Expert

The compounding regulatory and financial challenges facing Heramba Electric reflect a critical governance situation that warrants immediate attention. The company is navigating a complex web of interrelated issues that threaten its Nasdaq listing status.

The notice of non-compliance with Nasdaq's minimum Market Value of Listed Securities requirement represents the second listing deficiency notice in a matter of days, following a separate notification regarding minimum bid price requirements. Together, these violations signal significant market concerns about the company's financial stability and future prospects.

Particularly troubling is the German insolvency filing for subsidiary Heramba, triggered by a substantial payment dispute with KB GmbH involving approximately EUR 24.86 million. The fact that the company's managing director determined Heramba was "currently unable to pay its existing liabilities due and may also be overindebted" suggests critical liquidity issues that could have cascading effects throughout the corporate structure.

The sequence and timing of these events - from the acquisition disputes to the insolvency filing and subsequent listing compliance issues - indicates potential governance gaps in risk management and financial oversight. With a current market capitalization of only $11.3 million, the company faces material challenges in meeting Nasdaq's $35 million minimum market value requirement within the 180-day compliance window. This situation creates significant uncertainty for shareholders as the delisting risk grows without substantial financial improvement or strategic restructuring.

DÜSSELDORF, GERMANY AND ATLANTA, GA / ACCESS Newswire / March 25, 2025 / As previously disclosed, and pursuant to the terms and conditions set forth in the Share Purchase Agreement, dated as of July 25 and 26, 2023, by and among Heramba GmbH ("Heramba"), Heramba Holdings, Inc. ("Heramba Holdings"), Knorr-Bremse Systeme für Schienenfahrzeuge GmbH ("KB GmbH") and Knorr-Brake Holding Corporation ("KB US"), as amended pursuant to the Amendment Agreement to Share Purchase Agreement, dated as of January 31, 2024, on February 6, 2024, (i) KB GmbH, as sole shareholder of Kiepe Electric GmbH, sold and transferred 85% of the equity interests in Kiepe GmbH, as well as certain receivables and shareholder loans, to Heramba, and (ii) KB US, as the sole member of Kiepe Electric LLC ("Kiepe US" and together with Kiepe GmbH, "Kiepe"), sold and transferred all ownership interests in Kiepe US, as well as certain receivables, to Heramba Holdings.

As previously disclosed, and pursuant to the terms and conditions set forth in the Business Combination Agreement, dated as of October 2, 2023, by and among Project Energy Reimagined Acquisition Corp., Heramba Electric plc, Heramba Merger Corp., Heramba Limited and Heramba, effective as of July 26, 2024, the business combination contemplated by the Business Combination Agreement was consummated resulting in, among other matters, each of Heramba, Heramba Holdings, Kiepe GmbH and Kiepe US becoming direct or indirect subsidiaries of the Company.

As previously disclosed, on January 9, 2025, Heramba received letters (the "Demand Letters") from KB GmbH demanding payment of certain funds allegedly owed under the Share Purchase Agreement, totaling approximately EUR 24,855,000 in the aggregate plus applicable default interest (collectively, the "Demanded Amounts"). Heramba and the Company subsequently delivered response letters to contest the Demanded Amounts and propose further discussions; however, no resolution was reached.

As previously disclosed, on January 30, 2025, as a consequence of the outstanding Demanded Amounts and in accordance with certain obligations under applicable German insolvency law, the managing director of Heramba determined that Heramba was currently unable to pay its existing liabilities due and may also be overindebted. Following such determination and upon authorization by the Company as sole shareholder of Heramba, on January 30, 2025, the managing director of Heramba filed for the opening of ordinary insolvency proceedings over the assets of Heramba (the "Insolvency Filing") with the local court of Düsseldorf in Germany (the "Court").

As previously disclosed, on March 17, 2025, Heramba received a delinquency notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC, indicating that the Company is not currently in compliance with the minimum bid price requirement set forth in Nasdaq's Listing Rules for continued listing on the Nasdaq Capital Market as the closing bid price for the Company's ordinary shares was below $1.00 per share for 30 consecutive business days. The Company has until September 8, 2025, to regain compliance with the minimum bid price requirement.

Heramba Electric plc (NASDAQ:PITA) ("Heramba Electric" or the "Company"), today announced that on March 19, 2025, it received a notification letter (the "Notice") from the Listing Qualifications Department of the Nasdaq Stock Market LLC ("Nasdaq"), indicating that the Company is currently not in compliance with the minimum Market Value of Listed Securities (MVLS) of $35 million set forth in Nasdaq's Listing Rules.

Nasdaq Listing Rule 5550(b)(2) MVLS requires listed securities to maintain a minimum Market Value of $35 million, and Nasdaq Listing Rule 5810(c)(3)(C) provides that require a Company to satisfy the applicable Price-based Requirement for a period in excess of ten consecutive business days, but generally no more than 20 consecutive business days, before determining that the Company has demonstrated an ability to maintain long-term compliance.

The Rules provide the Company a compliance period of 180 calendar days in which to regain compliance. If at anytime during this compliance period the Company's MVLS closes at $35 million or more for a minimum of ten consecutive business days, written confirmation of compliance will be send to the Company and this matter will be closed.

In the event that the Company does not regain compliance by September 17, 2025, the Company may be eligible for additional time to regain compliance. If the Company cannot demonstrate compliance by the allotted compliance period(s), Nasdaq's staff will notify the Company that its ordinary shares are subject to delisting.

Contact information: Michele Molinari, CEO, michele@herambaelectric.com

SOURCE: Heramba Electric plc

View the original press release on ACCESS Newswire

FAQ

What are the requirements for Heramba Electric (PITA) to regain Nasdaq compliance?

PITA must achieve a market value of listed securities of $35 million for 10 consecutive business days before September 17, 2025, and maintain a share price above $1.00 before September 8, 2025.

What happens if Heramba Electric (PITA) fails to meet Nasdaq requirements by September 2025?

If PITA fails to meet compliance requirements by the deadline, the company's ordinary shares may be subject to delisting from Nasdaq.

How much money is Heramba Electric (PITA) being demanded to pay by KB GmbH?

KB GmbH is demanding approximately EUR 24,855,000 plus applicable default interest under the Share Purchase Agreement.

When did Heramba Electric's (PITA) subsidiary file for insolvency?

Heramba filed for insolvency proceedings on January 30, 2025, with the local court of Düsseldorf in Germany.