GUELPH, Ontario - Zentek Ltd. (NASDAQ: ZTEK) (TSXV: ZEN), an intellectual property technology company, has been notified by the Nasdaq Stock Market LLC of a non-compliance issue regarding its share price. On September 11, 2024, Zentek received a notification letter stating that its common shares had not met the minimum bid price of US $1.00 for 31 consecutive business days, as required by Nasdaq Listing Rule 5550(a)(2).
According to the notification, which is not an indication of imminent delisting, Zentek's shares will continue to be listed and traded on the Nasdaq Capital Market under the symbol "ZTEK." The rule stipulates that if a company's shares fail to maintain the minimum bid price for 30 consecutive business days, it is considered non-compliant.
Zentek has been granted a 180-day period, until March 10, 2025, to regain compliance. To achieve this, the company's shares must close at or above US $1.00 for at least ten consecutive business days within this timeframe. If Zentek fails to regain compliance by the deadline, it may be eligible for an additional 180-day grace period, provided it meets certain market value and listing standards and potentially undertakes a reverse stock split.
The management of Zentek has expressed its intention to actively monitor the share price and explore all available options to regain compliance with the Nasdaq's minimum bid price requirement. The company's business operations remain unaffected by the receipt of the notification.
Zentek specializes in the development and commercialization of advanced products, including its patented ZenGUARD™ technology, which has demonstrated significant anti-microbial activity and is designed to improve the efficiency of surgical masks and HVAC systems. The company maintains its ZenGUARD™ production facility in Guelph, Ontario.
This news is based on a press release statement and contains no speculative information.
In other recent news, Zentek Ltd. has upsized its private placement offering to approximately $3.07 million, issuing 2,361,538 units priced at $1.30 each. Each unit comprises one common share and a half warrant, with a full warrant enabling the holder to purchase an additional common share at $3.00 within a 24-month period. The raised funds are intended for working capital and general corporate purposes, subject to requisite corporate and regulatory approvals.
In addition, Zentek's subsidiary, Triera Biosciences Ltd., has reported promising results in the development of a treatment and prevention strategy for the H5N1 avian influenza. Initial tests have shown a potential increase in binding affinity compared to existing treatments for SARS-CoV-2.
Lastly, changes within Zentek's leadership team have been announced, with Dr. Francis Dubé stepping down as Chief Operating Officer and Brian Bosse resigning from his director role. Both individuals will continue to be involved with the company, with Bosse transitioning to an advisory board position. These are the latest developments in the company's ongoing operations.
InvestingPro Insights
In light of Zentek's recent notification from Nasdaq regarding its share price, a closer look at the company's financial metrics and market performance provided by InvestingPro can offer additional context. Zentek, with a market capitalization of $90.33 million, has been trading near its 52-week low, reflecting the challenges it faces in the market. InvestingPro Tips indicate that the company is a niche player in its industry and has been suffering from weak gross profit margins, which could be contributing factors to its current share price situation.
Furthermore, Zentek's revenue growth over the last twelve months as of Q1 2025 stands at 42.65%, which suggests that while the company may be expanding its sales, it is doing so with a significant cost, resulting in a gross profit margin of -1098.18%. This discrepancy between revenue growth and profitability may be a point of concern for investors. Additionally, the company has been operating with a negative earnings per share (EPS) of -0.08 USD, underscoring its lack of profitability over the last twelve months.
Despite these challenges, Zentek has some financial positives. The company's liquid assets exceed its short-term obligations, which could provide some stability as it navigates its current share price issue. Moreover, for investors seeking more in-depth analysis, there are over 10 additional InvestingPro Tips available, which could provide further insights into Zentek's financial health and market position.
For those interested in exploring these additional tips, they can be found at InvestingPro's dedicated Zentek page: https://www.investing.com/pro/ZTEK.
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