ASHFORD RECEIVES LETTER OF NON-COMPLIANCE FROM NYSE AMERICAN
- None.
- The company is not in compliance with NYSE American continued listing standards, reporting a stockholders' deficit of $295.7 million and losses from continuing operations and/or net losses in three of its four most recent fiscal years.
- The current market value of publicly held shares was below $15 million, not meeting the second standard for compliance with Section 1003(a) of the Company Guide.
Insights
The notification received by Ashford Inc. regarding non-compliance with NYSE American listing standards is a significant financial development, signaling potential instability in the company's equity structure. A stockholders' deficit of $295.7 million is alarming, as it suggests a negative net worth, which is often interpreted as a risk of insolvency. The company's history of losses in recent fiscal years further exacerbates this concern, indicating a trend that could deter investor confidence.
From a financial perspective, the ability of Ashford to maintain assets and revenue above $50 million is a positive sign of operational scale. However, the shortfall in market value of publicly held shares below the $15 million threshold is indicative of a low equity valuation by the market, potentially reflecting a bearish outlook on the company's future profitability or liquidity concerns. The requirement to submit a compliance plan offers a remedial pathway, but the extended deadline until June 2025 to regain compliance underscores the severity of the financial challenges faced by Ashford.
Compliance with stock exchange standards is a critical indicator of a company's market position and investor perception. Ashford's current situation, where it meets one standard based on asset and revenue size but fails another due to insufficient market value of publicly held shares, suggests a disconnect between the company's operational size and its market capitalization. This could be due to a variety of factors, including but not limited to, market skepticism about the company's strategic direction, competitive pressures in the asset management and real estate sectors, or broader economic conditions affecting investor sentiment.
It is essential to monitor the market's reaction to Ashford's plan to regain compliance. If the plan is well-received, it could lead to a recovery in share price and market value. Conversely, failure to convince stakeholders of the company's viability could lead to further erosion of market capitalization and liquidity, potentially triggering a delisting scenario which would have significant repercussions for existing investors and the company's ability to raise capital.
The legal implications of Ashford's non-compliance with NYSE American listing standards are procedural yet impactful. The requirement for a compliance plan is a regulatory mechanism designed to protect investors by ensuring that listed companies maintain certain financial health metrics. Ashford's ability to remain listed while it develops and implements its compliance plan is a grace period that prevents immediate delisting, which would have more severe legal and financial consequences.
However, the company's operations and SEC reporting requirements remain unchanged, which is crucial for maintaining transparency and allowing investors to make informed decisions. The legal process for regaining compliance will require careful planning, disclosure and possibly restructuring initiatives, which could involve negotiation with creditors, equity restructuring, or operational changes to improve financial performance.
However, Section 1003(a) of the Company Guide states that the NYSE American will not normally consider suspending dealings in, or removing from the list, the securities of a listed company which is below standards (i) and (ii) of Section 1003(a) if the listed company is in compliance with the following two standards: (1) total value of market capitalization of at least
The Company must submit a plan of compliance (the "Plan") by January 19, 2024 addressing how it intends to regain compliance with Sections 1003(a)(i) and (ii) of the Company Guide by June 20, 2025, or sooner if the NYSE American determines that the nature and circumstances of the Company's continued listing status warrant a shorter period of time. The Company intends to fully comply with the NYSE American's requests and will submit its Plan accordingly.
The Company's stock will continue to be listed on the NYSE American while the Company evaluates its various alternatives. The Company's receipt of such notification from the NYSE American does not affect the Company's business, operations or reporting requirements with the
Ashford is an alternative asset management company with a portfolio of strategic operating businesses that provides global asset management, investment management and related services to the real estate and hospitality sectors.
Forward-Looking Statements
Certain statements and assumptions in this press release contain or are based upon "forward-looking" information and are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, among others, statements about the Company's strategy and future plans. These forward-looking statements are subject to risks and uncertainties. When we use the words "will likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "intend," or similar expressions, we intend to identify forward-looking statements. Such statements are subject to numerous assumptions and uncertainties, many of which are outside Ashford Inc.'s control.
These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those anticipated, including, without limitation: our ability to regain compliance with NYSE American LLC continued listing standards; our ability to regain Form S-3 eligibility; our ability to repay, refinance or restructure our debt and the debt of certain of our subsidiaries; anticipated or expected purchases or sales of assets; our projected operating results; completion of any pending transactions; our understanding of our competition; market trends; projected capital expenditures; the impact of technology on our operations and business; general volatility of the capital markets and the market price of our common stock and preferred stock; availability, terms and deployment of capital; availability of qualified personnel; changes in our industry and the markets in which we operate, interest rates or the general economy; and the degree and nature of our competition. These and other risk factors are more fully discussed in the Company's filings with the Securities and Exchange Commission.
The forward-looking statements included in this press release are only made as of the date of this press release. Such forward-looking statements are based on our beliefs, assumptions, and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. Investors should not place undue reliance on these forward-looking statements. The Company can give no assurance that these forward-looking statements will be attained or that any deviation will not occur. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events or circumstances, changes in expectations, or otherwise, except to the extent required by law.
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SOURCE Ashford Inc.
FAQ
What is the company name and ticker symbol of the business receiving the notification from NYSE American?
When must the Company submit a plan of compliance and what does it need to address?
What are the consequences of not regaining compliance with the NYSE American continued listing standards?
What are the business operations of Ashford Inc.?
