Heramba Electric plc Announces Receipt of Notice from Nasdaq Regarding the Minimum Bid Price Requirement

Rhea-AI Summary

Heramba Electric plc (NASDAQ:PITA) has received a notice from Nasdaq on March 11, 2025, indicating non-compliance with the minimum bid price requirement. The company's shares have traded below $1.00 for 30 consecutive business days, violating Nasdaq Listing Rule 5550(a)(2).

The company has until September 8, 2025 to regain compliance by maintaining a closing bid price at or above $1.00 for a minimum of 10 consecutive business days. During this 180-day period, PITA shares will continue trading on Nasdaq uninterrupted.

This notification follows recent challenges, including an insolvency filing by subsidiary Heramba GmbH on January 30, 2025, after receiving demand letters from KB GmbH for approximately EUR 24,855,000 plus interest related to a previous Share Purchase Agreement.

Positive

• Company remains listed on Nasdaq during 180-day compliance period
• Potential eligibility for additional compliance time if needed

Negative

• Stock trading below $1.00 for 30 consecutive business days
• Risk of Nasdaq delisting if compliance not achieved
• Subsidiary Heramba GmbH filed for insolvency
• EUR 24.86M payment demanded by KB GmbH

Insights

Financial Analyst

Heramba Electric's latest announcement reveals critical financial and regulatory challenges threatening the company's stability and market position. The Nasdaq delinquency notification for failing to maintain the minimum $1.00 bid price requirement for 30 consecutive business days places PITA on a precarious timeline, requiring compliance by September 8, 2025, or face potential delisting.

More concerning is the disclosed insolvency filing for Heramba GmbH (a subsidiary) with the German court in Düsseldorf. This filing occurred after the subsidiary was deemed unable to pay existing liabilities and potentially overindebted. The insolvency stems from an unresolved financial dispute with KB GmbH, which is demanding approximately €24,855,000 plus interest allegedly owed under a Share Purchase Agreement.

This combination of regulatory pressure and financial distress creates significant uncertainty for shareholders. The insolvency of a key subsidiary typically indicates severe operational challenges and potential downstream effects on the parent company's financial health. While the Nasdaq notice provides a 180-day grace period with a possible extension, addressing both the share price issue and the substantial financial dispute will require significant corporate action.

The potential delisting would severely impact liquidity and institutional investment access, further complicating any recovery efforts. The current situation represents a fundamental challenge to Heramba's operational viability and market standing that goes beyond a simple share price correction.

Legal Expert

The multi-layered legal issues facing Heramba Electric represent substantial governance and compliance concerns. The company is navigating three interconnected legal challenges that significantly impact shareholder value.

First, the Nasdaq compliance issue follows a clear regulatory framework. While the 180-day remediation period is standard procedure, the company's ability to boost its share price above $1.00 for the required 10 consecutive days will be severely complicated by the other legal proceedings. If unsuccessful, the company would need to demonstrate very specific compliance capabilities to qualify for an extension period.

Second, the German insolvency filing for Heramba GmbH introduces complex cross-border legal complications. German insolvency proceedings differ significantly from U.S. bankruptcy procedures, particularly regarding creditor rights and management replacement. Once appointed, an insolvency administrator will have extraordinary powers over the subsidiary's assets and operations.

Third, the €24.85 million financial dispute with KB GmbH represents a material contingent liability. The company's acknowledgment that resolution attempts have failed suggests potential litigation, which could further drain resources and management attention.

The interconnection between these issues creates a concerning legal spiral - the insolvency filing complicates the financial dispute resolution, which affects the company's ability to address the Nasdaq compliance issues. This legal entanglement significantly impairs management's flexibility in navigating these challenges.

DUSSELDORF, GERMANY AND ATLANTA, GA / ACCESS Newswire / March 17, 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 the Demand Letters to contest the Demanded Amounts and propose further discussions among the relevant parties to resolve such matters; 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 has determined that Heramba is 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").

Heramba Electric plc (NASDAQ:PITA) ("Heramba Electric" or the "Company"), today announced that on March 11, 2025, it received a delinquency notification letter (the "Notice") from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq"), 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. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. The Notice provides that the Company has a period of 180 calendar days from the date of the Notice, or until September 8, 2025, to regain compliance with the minimum bid price requirement.

The receipt of the Notice has no immediate effect on the Company's business operations or the listing of the Company's ordinary shares, which will continue to trade uninterrupted on the Nasdaq under the ticker "PITA" during the 180-day Notice period. If at any time before September 8, 2025, the bid price of the Company's ordinary shares closes at or above $1.00 per share for a minimum of 10 consecutive business days, Nasdaq will provide written confirmation of compliance to the Company.

In the event that the Company does not regain compliance by September 8, 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:

Michele
michele@herambaelectric.com

SOURCE: Heramba Electric plc

View the original press release on ACCESS Newswire

FAQ

What is the deadline for Heramba Electric (PITA) to regain Nasdaq compliance?

Heramba Electric has until September 8, 2025 to regain compliance by maintaining a closing bid price above $1.00 for at least 10 consecutive business days.

How much money is KB GmbH demanding from Heramba Electric's subsidiary?

KB GmbH is demanding approximately EUR 24,855,000 plus applicable default interest from Heramba GmbH.

What happens if PITA stock doesn't meet Nasdaq's minimum bid requirement by September 2025?

If PITA fails to regain compliance by September 8, 2025, it may be eligible for additional time, but ultimately faces potential delisting from Nasdaq.

When did Heramba GmbH file for insolvency proceedings?

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