AirNet Announces Receipt of Nasdaq’s Determination to Grant Extension to Regain Compliance

Rhea-AI Summary

AirNet Technology Inc. (Nasdaq: ANTE) received an extension from Nasdaq to regain compliance with the Minimum Stockholders' Equity Requirement. The company entered into agreements and completed transactions to satisfy the requirement, including share subscription agreements and equity transfers. Nasdaq will monitor the company's ongoing compliance, with potential delisting if compliance is not maintained.

Positive

• AirNet Technology Inc. successfully regained compliance with the Minimum Stockholders' Equity Requirement for continued listing on the Nasdaq Capital Market.

• The completion of various transactions, including share subscription agreements and equity transfers, helped the company meet the compliance requirement.

Negative

• If AirNet Technology Inc. fails to evidence compliance with the Minimum Stockholders' Equity Requirement in its next periodic report, it may face delisting from the Nasdaq Capital Market.

Financial Analyst

AirNet Technology Inc.'s recent maneuver to regain compliance with Nasdaq's Minimum Stockholders' Equity Requirement is a strategic move that could instill a cautious optimism among investors. The company's ability to fulfill this requirement through a mix of private placements and the sale of equity interests highlights a proactive approach to maintaining its listing status. The cash influx from these transactions, totaling approximately US$13.3 million, may provide the necessary buffer against delisting risks in the short term. However, the real test lies ahead; the company must demonstrate sustained financial health to avoid future scrutiny. The critical factor moving forward is whether these transactions can help stabilize the company's operations and pave the way for profitability. Investors should monitor subsequent financial reports for evidence of improved liquidity and operational efficiency, which are important indicators of the company's long-term viability.

Market Research Analyst

From a market perspective, AirNet's recent activities underscore the challenges faced by companies operating within the stringent regulatory framework of stock exchanges like Nasdaq. While the successful share subscription agreement with Wealthy Environment Limited and the private placement of shares are positive developments, they also signal potential volatility in the company's market performance. Investors should be mindful of the broader industry trends and AirNet's positioning within them. The sale of the equity interests also suggests a strategic shift or divestment, which could impact the company's core capabilities and future growth areas. How the market interprets these transactions, in terms of confidence in the company's governance and strategic direction, will significantly influence the stock's performance. Ongoing compliance with Nasdaq's listing requirements will be a key barometer for investor sentiment in the upcoming quarters.

Legal Expert

The legal implications of AirNet's compliance efforts with Nasdaq's listing rules should not be overlooked. The company has clearly taken decisive legal steps to meet the regulatory standards, particularly through the share subscription agreement and equity transfers. The intricate legal processes involved in these transactions, including adherence to disclosure requirements, serve to protect the interests of shareholders and maintain corporate transparency. For investors, it is essential to understand that while AirNet has addressed immediate regulatory concerns, it must continue to navigate the legal complexities of the capital market to safeguard its listing status. Ongoing legal diligence and transparency will be important in maintaining investor trust and avoiding potential delisting, which would have significant legal and financial repercussions.

BEIJING, May 08, 2024 (GLOBE NEWSWIRE) -- AirNet Technology Inc., formerly known as AirMedia Group Inc. (“AirNet” or the “Company”) (Nasdaq: ANTE), today announced that it received a notification letter dated April 29, 2024 from the Listing Qualifications Department of The Nasdaq Stock Market Inc. (the “Nasdaq”) notifying that Nasdaq has determined to grant the Company an extension to regain compliance with the Nasdaq Listing Rule 5550(b)(1) for continued listing (the “Rule”).

As previously reported, on January 5, 2024, the Company received written notice from Nasdaq notifying the Company that, based on the Company’s stockholders’ equity as reported in the Company’s Form 6-K dated December 28, 2023, the Company did not meet the minimum stockholders’ equity requirement for continued listing due to its failure to maintain a minimum of $2.5 million in stockholders’ equity (“Minimum Stockholders’ Equity Requirement”), or the alternatives of market value of listed securities or net income from continuing operations for continued listing under the Rule. On February 8, 2024, the Company submitted to Nasdaq its plan to regain compliance with the Minimum Stockholders’ Equity Requirement, as supplemented with additional materials on March 10, 2023 (the “Plan”). Based on the Plan, Nasdaq has determined to grant the Company an extension to regain compliance with the Rule and provided the Company with two alternatives to evidence compliance with the Rule. Pursuant to the first alternative, the Company must furnish to the SEC and Nasdaq a publicly available report including: (1) a disclosure of Nasdaq’s deficiency letter and the specific deficiencies cited, (2) a description of the completed transaction or event that enabled the Company to satisfy the Minimum Stockholders’ Equity Requirement, (3) an affirmative statement that, as of the date of such publicly available report, the Company believes it has regained compliance with the Minimum Stockholders’ Equity Requirement based upon the specific transaction or event referenced in (2), and (4) a disclosure stating that Nasdaq will continue to monitor the Company’s ongoing compliance with the Minimum Stockholders’ Equity Requirement and, if at the time of its next periodic report the Company does not evidence compliance, that it may be subject to delisting.

As previously disclosed, on February 8, 2024, Wealthy Environment Limited, a company incorporated in the British Virgin Islands, which is wholly owned by Mr. Herman Man Guo, entered into a share subscription agreement with the Company, pursuant to which the Company transferred 4,448,847 ordinary shares, par value $0.04 per share (the “Shares”), that were previously held by and in the Company’s name as treasury shares and issued an additional 2,118,584 Shares to Wealthy Environment Limited on March 6, 2024. The aggregate subscription price for the 6,567,431 Shares was approximately US$7.6 million in cash. In February 2024, the Company entered into an equity transfer agreement with an unaffiliated third party, pursuant to which the Company disposed of all the 33.67% of equity interests held by Yuehang Sunshine Network Technology Group Co., Ltd. in an equity investee for an aggregate consideration of RMB197.0 million. On April 15, 2024, the Company completed a private placement of 3,372,788 Shares for an aggregate subscription amount of US$5.7 million with certain investors.

As a result of the above three transactions, the Company believes that, as of the date of this press release, it has regained compliance with the Minimum Stockholders’ Equity Requirement for continued listing on the Nasdaq Capital Market under the Rule. The Company understands that Nasdaq will continue to monitor the Company’s ongoing compliance with the Minimum Stockholders’ Equity Requirement and, if at the time of its next periodic report the Company does not evidence compliance, it may be subject to delisting.

Forward-Looking Statements

This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “is expected to,” “anticipates,” “aim,” “future,” “intends,” “plans,” “believes,” “are likely to,” “estimates,” “may,” “should” and similar expressions. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements are based upon management’s current expectations and current market and operating conditions, and involve inherent risks and uncertainties, all of which are difficult to predict and many of which are beyond the Company’s control, which may cause its actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information is included in the Company’s filings with the U.S. Securities and Exchange Commission. All information provided in this announcement is as of the date of this announcement, and the Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

Contact

Penny Pei
Investor Relations 
AirNet Technology Inc. 
Tel: +86-10-8460-8678 
Email: penny@ihangmei.com

FAQ

What notification did AirNet receive from Nasdaq?

AirNet received a notification letter from Nasdaq regarding an extension to regain compliance with the Minimum Stockholders' Equity Requirement.

What actions did AirNet take to regain compliance with the requirement?

AirNet entered into share subscription agreements, equity transfer agreements, and completed transactions to satisfy the Minimum Stockholders' Equity Requirement.

What is the potential consequence if AirNet fails to evidence compliance in the next report?

If AirNet fails to evidence compliance with the Minimum Stockholders' Equity Requirement in its next periodic report, it may be subject to delisting from the Nasdaq Capital Market.