ShiftPixy, Inc. (NASDAQ:PIXY), a Miami-based employment agency service, announced that its CEO, Scott Absher, has been granted a conditional option to acquire 5,302,277 shares of the company's Preferred Class A Stock. The decision was approved by the holder of a majority of the company's shares via written consent on Thursday.
The option, detailed in a recent 8-K filing with the Securities and Exchange Commission, is contingent upon a reverse stock split of ShiftPixy's common shares and can only be exercised once, following the split. It also requires the CEO to tender the par value per share for the preferred shares upon exercise. The reverse split and subsequent effectiveness of the Option Agreement are expected to occur no sooner than 20 days after a definitive information statement is sent to shareholders.
In other recent news, Miami-based staffing agency ShiftPixy, Inc. is grappling with a potential Nasdaq delisting due to a market value shortfall. The company failed to meet the Nasdaq's $35 million market value of listed securities (MVLS) threshold for 30 consecutive business days, triggering a 180-day grace period that has since lapsed. In response, ShiftPixy plans to request a hearing before the Nasdaq Hearing Panel, temporarily halting the delisting process as it explores options to regain compliance.
Simultaneously, ShiftPixy announced a securities offering that could potentially raise about $2.5 million. The offering, which includes over 2.4 million common shares and series A and B warrants priced at $1.04 each, is being facilitated by A.G.P./Alliance Global Partners (NYSE:GLP). Additionally, ShiftPixy negotiated with an existing investor to adjust the exercise price of previously issued warrants to align with the current offering.
In a related development, ShiftPixy shareholders have approved several key proposals, including a reverse stock split. The split could range from one-for-two to one-for-twenty and is viewed as a strategy to increase the market price of shares.
InvestingPro Insights
In light of ShiftPixy, Inc.'s recent corporate actions, it is pertinent to consider the company's financial health and market performance. According to InvestingPro data, ShiftPixy currently holds a market capitalization of $8.63 million, with a revenue of $15.02 million over the last twelve months as of Q3 2024. However, the company has faced a revenue decline of 27.85% during the same period. This is consistent with an InvestingPro Tip highlighting the company's rapid cash burn and weak gross profit margins, which stand at a mere 3.88%.
InvestingPro Tips further reveal that ShiftPixy's stock is known for high price volatility and has performed poorly over the last decade, with significant price declines over the last year and three months. Moreover, the company's short-term obligations exceed its liquid assets, and analysts do not expect ShiftPixy to be profitable this year. These insights, coupled with the company's current P/E ratio of -0.05, paint a challenging financial picture for potential investors.
For those interested in a deeper analysis, InvestingPro offers additional tips, including insights into the company's debt levels and free cash flow yield. The platform currently lists 13 more InvestingPro Tips, which can provide a more comprehensive understanding of ShiftPixy's financial and market position. To explore these further, one can visit the company-specific page on InvestingPro.
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