JERUSALEM - Scinai Immunotherapeutics Ltd. (NASDAQ: SCNI), a biopharmaceutical company, is currently navigating compliance challenges with Nasdaq's listing requirements. The company received a second notification from Nasdaq on May 20, 2024, indicating that it does not meet the minimum stockholders' equity requirement for continued listing on the Nasdaq Capital Market. The Nasdaq Listing Rule 5550(b)(1) mandates a minimum stockholders' equity of $2.5 million, while Scinai reported a stockholders' deficit of $4.569 million in its annual report for the fiscal year ending December 31, 2023.
Previously, on May 6, 2024, Scinai was notified of non-compliance with Nasdaq's minimum $1.00 bid price rule. The company has since implemented a ratio change of its American Depositary Shares (ADSs) to its non-traded ordinary shares, essentially a reverse split, in an attempt to address this issue.
Scinai is scheduled for a hearing with the Nasdaq Hearings Panel on June 18th to present a plan to regain compliance. Part of this plan may include converting a portion of the company's loan from the European Investment Bank (EIB) into equity, a move Scinai believes would be favorable for both the company and its shareholders. However, this is contingent upon formal approval from the EIB and the fulfillment of any conditions precedent to the satisfaction of the EIB.
The company's ADSs continue to trade on the Nasdaq Capital Market under the symbol "SCNI" as the notice does not immediately affect its listing. Scinai specializes in developing biological products for inflammation and immunology and provides contract development and manufacturing organization (CDMO) services through its Scinai Bioservices unit.
InvestingPro Insights
Scinai Immunotherapeutics Ltd. (NASDAQ: SCNI) faces significant financial challenges, as highlighted by recent data and analysis. With a market capitalization of just $1.6 million, the company's financial position appears precarious. This is further underscored by a negative price-to-earnings (P/E) ratio over the last twelve months as of Q4 2023, standing at -0.25, which suggests the company is not generating positive earnings relative to its share price.
The company's operating income, adjusted for the same period, was a loss of $9.71 million, reflecting substantial operational challenges. Additionally, the return on assets was deeply negative at -29.19%, indicating that the company is struggling to generate profit from its asset base. These metrics paint a picture of a company that is currently not financially healthy.
InvestingPro Tips for SCNI reveal a company that is quickly burning through cash and has weak gross profit margins. These issues are critical for investors to consider, especially in light of the company's non-compliance with Nasdaq's listing requirements. The stock has also taken a significant hit, with a one-year price total return as of the most recent data showing an alarming decline of -80.62%. Furthermore, SCNI does not pay a dividend, which might be a point of consideration for income-focused investors.
For those looking to delve deeper into Scinai's financial health, InvestingPro offers additional insights. There are 11 more InvestingPro Tips available, which could provide a more comprehensive understanding of the company's financial position and performance. Interested readers can find these tips at https://www.investing.com/pro/SCNI. To enhance your InvestingPro experience, use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.