Zoomcar Holdings, Inc. (NASDAQ:ZCAR), an auto rental and leasing service provider, has received a deficiency notice from Nasdaq's Listing Qualifications Department. The notice, dated October 29, 2024, indicates that Zoomcar's publicly held shares have fallen below the minimum requirement for continued listing on The Nasdaq Global Market.
The company, which is also listed under the trading symbol ZCARW for its warrants, has been alerted that its publicly held shares do not meet the 1,100,000 share minimum as required by Nasdaq Listing Rule 5450(b)(1)(B). Despite this, the trading of Zoomcar's common stock remains unaffected and will continue under the symbol "ZCAR."
Zoomcar has a 45-day window to submit a plan to regain compliance and, if accepted by Nasdaq, could be granted up to 180 days to comply. If the plan is rejected, the company can appeal before a Nasdaq Hearings Panel. The possibility of transferring the listing to the Nasdaq Capital Market, which has a lower minimum publicly held shares requirement, is available if compliance criteria are met and a $5,000 application fee is paid.
This is not the company's first notice of non-compliance. Earlier in the year, on May 9 and July 26, 2024, Zoomcar was notified of non-compliance with the minimum bid price requirement and the minimum market value of publicly held shares, respectively. If compliance is not achieved by today, November 4, 2024, Zoomcar will receive a delisting notice and will have an opportunity to appeal.
In other recent news, Zoomcar Holdings, Inc. has experienced significant developments. The company has reappointed Uri Levine, Waze Co-Founder, as Strategic and Financial Advisor, a move welcomed by interim CEO Hiroshi Nishijima for his proven track record in scaling businesses. This comes along with the company's shareholders approving a reverse stock split and electing two Class I directors, Swatick Majumdar and John Clarke, to the board.
The shareholders also consented to the exercise of the Bridge Warrants, potentially leading to the issuance of over 20% of Zoomcar's outstanding common stock. Furthermore, Grant Thornton Bharat LLP was ratified as the company's independent registered public accounting firm for the fiscal year ending March 31, 2025.
Additionally, Zoomcar is facing potential delisting from Nasdaq due to non-compliance with the minimum market value requirement. The company has until January 21, 2025, to regain compliance.
Leadership changes have also occurred, with a 50% salary reduction for interim CEO Hiroshi Nishijima and the departure of Zoomcar's President, Mr. Adarsh Menon. These are the recent developments within the company's operations.
InvestingPro Insights
Recent InvestingPro data paints a challenging picture for Zoomcar Holdings, Inc. (NASDAQ:ZCAR), aligning with the company's Nasdaq listing troubles. The company's market capitalization stands at a mere $3.82 million, reflecting investor concerns. Zoomcar's financial health appears precarious, with InvestingPro Tips highlighting that the company "operates with a significant debt burden" and is "quickly burning through cash."
The stock's performance has been particularly poor, with InvestingPro data showing a staggering year-to-date price total return of -98.63% as of the latest available data. This aligns with the InvestingPro Tip that the stock is "trading near 52-week low." Additionally, the company's revenue of $9.52 million for the last twelve months, coupled with a negative operating income margin of -248.48%, underscores the financial challenges Zoomcar faces.
These insights from InvestingPro provide context to Zoomcar's struggle to maintain its Nasdaq listing. Investors seeking a more comprehensive analysis can access 15 additional InvestingPro Tips for ZCAR, offering a deeper understanding of the company's financial position and market performance.
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