Hempacco Co., Inc., a manufacturer of cigarette alternatives, is facing delisting from the Nasdaq Stock Market after failing to meet certain regulatory requirements. The San Diego-based company did not hold its annual shareholder meeting within the stipulated timeframe and has delayed filing its annual and quarterly reports.
On Monday, Hempacco received a notice from Nasdaq stating that its common stock is subject to delisting due to non-compliance with the annual meeting requirement for listed companies. Additional grounds for delisting include the company's failure to submit its Annual Report for the fiscal year ended December 31, 2023, and its Quarterly Report for the quarter ended March 31, 2024.
The company, which trades under the ticker HPCO, has announced its intention to appeal the delisting decision. Hempacco plans to request a hearing before a Nasdaq Hearings Panel, which can grant a temporary stay of the delisting. The company aims to file the overdue reports and hold its annual shareholder meeting in the near future, expressing confidence in meeting the conditions for an extended stay.
Hempacco's management has acknowledged the significance of the situation, emphasizing their commitment to resolving the filing delays and maintaining compliance with Nasdaq's listing rules. The company's forward-looking statements indicate efforts to address the identified accounting practice deficiencies and enhance internal control over financial reporting.
The potential delisting raises concerns for Hempacco's investors and highlights the importance of adhering to financial reporting standards. The company's future on Nasdaq now hinges on the outcome of its appeal and ability to fulfill the exchange's regulatory criteria.
This article is based on a press release statement.
In other recent news, Hempacco Co., Inc. faces a potential delisting from Nasdaq due to a delay in filing its quarterly and annual reports. The company has been issued notices by the Nasdaq Listing Qualifications Department for non-compliance with Listing Rule 5250(c)(1), which requires timely filing of periodic reports.
Hempacco has been given deadlines to present plans to regain compliance, but there is no guarantee that Nasdaq will accept these plans or that the company will meet the extended deadlines.
In a separate development, Hempacco and Illumination Brands have announced plans for a strategic merger of their U.S. operations. The proposed merger aims to create a vertically integrated beverage and snack brand incubator named Illumination Brands. The combined entity is expected to generate $35 million in revenues in its first year.
The merger would combine Hempacco's manufacturing and R&D expertise with Illumination Brands' extensive distribution network, which spans over 5,000 retail locations. The vision for the combined company involves not only product innovation but also serving as a hub for new beverage concepts, providing entrepreneurs with the necessary tools and resources from manufacturing to retail distribution.
These are the latest developments for Hempacco, a company known for its hemp-based smoking alternatives and functional beverages. The company's future compliance with Nasdaq's listing requirements and the outcome of the proposed merger with Illumination Brands remain subject to further developments.
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