SEATTLE, WA - Leafly Holdings, Inc., a company specializing in prepackaged software services, is currently facing a potential delisting from the Nasdaq Stock Market. The firm, which trades under the symbols "LFLY" for its common stock and "LFLYW" for its warrants, received a notification from Nasdaq on April 9, 2024, indicating non-compliance with the minimum net income requirement for continued listing.
The specific rule in question requires a minimum of $500,000 in net income from continuing operations for the most recently completed fiscal year, or two of the last three fiscal years. After submitting a plan to regain compliance, Leafly was informed on Thursday, October 4, 2024, that the plan was denied, and a delisting determination was made.
In response, Leafly intends to request a hearing before a Nasdaq Hearing Panel, which will automatically stay any suspension or delisting actions until the hearing's conclusion and any subsequent extension period granted. The Panel could allow Leafly up to 180 days from the delisting notification to meet the compliance criteria.
For now, Leafly's securities will continue to be traded on the Nasdaq Capital Market. However, the outcome of the appeal and the company's ability to satisfy the Nasdaq's Continued Listing Standards remain uncertain.
The forward-looking statements from Leafly suggest plans to present a compliance strategy to the Panel, but they also acknowledge the risks involved, including the possibility that the appeal might not be successful or that Nasdaq may not grant a reprieve from delisting. The company's next steps and strategies to address these compliance issues are likely to be scrutinized by investors and market observers.
This news comes from a recent SEC filing by Leafly Holdings, Inc., and the company has stated that it will not update these forward-looking statements unless required by law. Leafly's financial performance and ability to meet Nasdaq's listing requirements will continue to be monitored closely.
In other recent news, Leafly Holdings, Inc., a prominent online cannabis discovery marketplace, disclosed its financial results for the second quarter. The company reported a revenue of $8.7 million and a net loss of $1.3 million, in addition to a positive adjusted EBITDA of $483,000. Despite facing a decrease in its retail account base, Leafly is implementing strategies to improve operational efficiency and monetize its platform via new features.
The company is also expressing optimism about its expansion endeavors, such as its collaboration with Uber (NYSE:UBER) Eats in Alberta, Canada, and potential market growth in Ohio and Florida. For the third quarter, Leafly is projecting a revenue of roughly $8.4 million and an adjusted EBITDA loss of less than $1 million.
InvestingPro Insights
Leafly Holdings' current financial situation aligns with the delisting concerns highlighted in the article. According to InvestingPro data, the company's revenue for the last twelve months as of Q2 2024 was $38.1 million, with a concerning revenue growth of -16.85% over the same period. This decline in revenue is further emphasized by an InvestingPro Tip indicating that analysts anticipate sales decline in the current year.
The company's struggle with profitability is evident from its negative operating income of -$3.75 million and a negative operating income margin of -9.83%. An InvestingPro Tip also points out that Leafly has not been profitable over the last twelve months, which directly relates to the Nasdaq's minimum net income requirement mentioned in the article.
Despite these challenges, Leafly maintains an impressive gross profit margin of 89.1%, as noted in another InvestingPro Tip. This could potentially be a positive point in the company's appeal to the Nasdaq Hearing Panel.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Leafly Holdings, providing a deeper understanding of the company's financial health and market position.
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