ShiftPixy, Inc., a Miami-based employment agency, has officially withdrawn its appeal against a delisting notice from The Nasdaq Stock Market LLC, resulting in the suspension of trading of its common stock as of today, Monday. The company had previously received communication from Nasdaq on August 28, 2024, regarding the delisting due to non-compliance with the exchange's listing requirements.
The decision to withdraw the appeal was conveyed to Nasdaq's Hearings Panel via an email dated October 22, 2024. As a consequence, trading of ShiftPixy's shares on Nasdaq was halted at the start of the trading session today. Nasdaq will proceed with the formalities of delisting by filing a Form 25 Notification of Delisting with the Securities and Exchange Commission after completing all necessary internal procedures.
ShiftPixy, incorporated in Wyoming and operating under the industrial classification of employment agencies, has not disclosed the specific listing standards it failed to meet. The company's fiscal year concludes on August 31, and it is registered with the IRS under the number 474211438.
In other recent news, ShiftPixy has announced its intent to acquire AI technology company TurboScale for $150 million, a strategic move expected to enhance its platform with advanced AI capabilities. The payment for this acquisition is set to be divided equally between stock and debt. The company's shareholders have also approved proposals to amend the company's warrant agreement and to increase its authorized shares. Additionally, ShiftPixy is facing potential delisting from Nasdaq due to non-compliance with the minimum publicly held shares requirement and a market value shortfall.
A hearing before the Nasdaq Hearing Panel has been requested by the company to temporarily halt the delisting process. ShiftPixy's CEO, Scott Absher, has been granted a conditional option to acquire over 5 million shares of Preferred Class A Stock, contingent upon a reverse stock split. Lastly, the company has announced a securities offering facilitated by A.G.P./Alliance Global Partners (NYSE:GLP), which could potentially raise about $2.5 million. These are all recent developments within the company.
InvestingPro Insights
The delisting of ShiftPixy (PIXY) from Nasdaq comes amid significant financial challenges for the company. According to InvestingPro data, PIXY's market capitalization has dwindled to just $3.27 million, reflecting the severe downturn in investor confidence. The company's revenue for the last twelve months as of Q3 2024 stood at $15.02 million, with a concerning revenue decline of 27.85% over the same period.
InvestingPro Tips highlight that PIXY is "quickly burning through cash" and "suffers from weak gross profit margins," which aligns with the company's struggle to meet Nasdaq's listing requirements. The gross profit margin of 3.88% for the last twelve months underscores the financial strain the company is experiencing.
The stock's performance has been abysmal, with InvestingPro data showing a one-year price total return of -91.41% as of the latest available data. This steep decline is consistent with the InvestingPro Tip that the "stock has taken a big hit over the last week" and has "fared poorly over the last month."
For investors seeking more comprehensive analysis, InvestingPro offers 16 additional tips on PIXY, providing a deeper understanding of the company's financial health and market position in these turbulent times.
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