HHG Capital Corporation, a blank check company, has been notified by the Nasdaq Stock Market that it no longer meets the exchange's listing requirements regarding independent directors and audit committee composition. The written notice, received by HHG Capital on Monday, June 25, 2024, follows the resignation of Mr. Ho Hock Lye Benjamin from the company's board and audit committee.
The Nasdaq Listing Qualifications Department indicated that HHG Capital's current board composition fails to comply with Listing Rule 5605, which mandates a certain number of independent directors and audit committee members.
Nevertheless, Nasdaq rules afford HHG Capital a grace period to regain compliance. The company has until the earlier of its next annual shareholders' meeting or January 8, 2025, to address the shortfall.
To avoid delisting, HHG Capital must provide Nasdaq with evidence, such as biographies of any new directors, that it has reestablished compliance with the listing rules by the specified deadline. If the company fails to meet the requirements by then, it may receive a delisting notice. HHG Capital would have the opportunity to appeal any delisting decision to a Nasdaq Hearings Panel.
The company, which is incorporated in the British Virgin Islands and headquartered in Singapore, is known for its focus on the real estate and construction sectors. It is traded on the Nasdaq Capital Market under various symbols, including HHGC for its ordinary shares and HHGCU, HHGCW, and HHGCR for its units, warrants, and rights, respectively.
This development comes at a time when HHG Capital is categorized as an emerging growth company and is navigating the complexities of financial accounting standards applicable to public entities. The company's response to this challenge will be crucial in determining its future on the Nasdaq exchange.
The information reported here is based on a press release statement.
InvestingPro Insights
As HHG Capital Corporation confronts compliance issues with Nasdaq's listing requirements, it's important to consider the company's financial health and market performance. According to real-time data from InvestingPro, HHG Capital has a market capitalization of $58.79 million and is trading at a P/E ratio of 40.34. While the company's P/E ratio is high, its PEG ratio, which measures the stock's value accounting for growth, is quite low at 0.19, indicating potential undervaluation relative to near-term earnings growth.
InvestingPro Tips suggest that HHG Capital is trading at a high earnings multiple and suffers from weak gross profit margins. Moreover, the company's stock price often moves in the opposite direction of the market, which could be a concern for investors seeking market-correlated returns. Notably, HHG Capital has been profitable over the last twelve months but does not pay a dividend, which might influence the investment decisions of income-focused shareholders.
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