American Oncology Network Announces Voluntary Delisting From Nasdaq
American Oncology Network (AON) announced its decision to delist its Class A common stock and warrants from Nasdaq, effective around June 7, 2024. This decision, recommended by a Special Committee of independent directors, aims to address issues such as the lack of research coverage, an inactive trading market, and high regulatory costs associated with Nasdaq listing. AON will file Form 25 with the SEC on or about May 31, 2024. The company plans to transition its securities to trading on the OTC Markets Group. CEO Todd Schonherz highlighted AON's financial health, boasting over $100 million in cash and a 42% revenue CAGR over the past five years.
- AON has a strong balance sheet with over $100 million in cash and short-term securities.
- A five-year revenue CAGR of 42% indicates robust growth.
- The addition of 40 providers and four new practices to the network this year shows ongoing expansion.
- Cost savings from reduced regulatory compliance expenses and personnel resources.
- Voluntary delisting may reduce transparency and accessibility for investors.
- Potential decrease in liquidity and market visibility as trading moves to OTC Markets.
- Uncertainty over whether a broker will continue to make a market in the common stock and warrants.
Insights
The voluntary delisting of American Oncology Network (AON) from Nasdaq is a significant move that requires careful scrutiny from a financial perspective. One of the primary factors for this decision is the lack of research coverage and an active trading market on Nasdaq. This situation might have limited liquidity and market interest, reducing the effectiveness of being publicly traded.
Additionally, the delisting aims to cut down on the significant costs and regulatory burdens tied to maintaining a Nasdaq listing. These savings could be redirected towards operational growth and expansion. Notably, AON's impressive five-year revenue CAGR of
However, transitioning to OTC Markets could pose liquidity risks. OTC markets are generally less transparent and less liquid compared to major exchanges. This could potentially affect stock valuation and investor confidence in the long run. Investors should weigh the benefits of cost-saving against the risks of reduced liquidity and market visibility.
From a market research standpoint, AON's decision to delist is driven by strategic evaluations. The company cited limited analyst coverage and low trading volume as primary reasons, which suggests that remaining on Nasdaq wasn't providing the intended advantages. As a result, the cost-benefit analysis favored delisting.
While delisting could streamline operations and save on regulatory compliance costs, it might also signal to the market a strategic pivot towards a more private-like operational strategy. This could attract speculators looking for a restructuring story but might deter conservative investors wary of the OTC market's lower transparency and liquidity.
Moreover, the company's narrative of redirecting focus on core business functions and financial prudence might resonate well with stakeholders looking for operational efficiency. However, the assurance of continued trading on OTC Markets, although viable, does not guarantee active market-making, posing a potential risk.
The legal implications of delisting from Nasdaq are significant. AON will file a Form 25 with the SEC to initiate this process. The move away from Nasdaq will relieve the company of the stringent reporting requirements mandated under Section 12(b) of the Securities Exchange Act of 1934. These requirements often involve substantial compliance costs and administrative burdens.
However, the shift to OTC Markets will still necessitate adherence to certain regulatory standards, although these are generally less rigorous. The reduced oversight could be a double-edged sword; while it offers operational flexibility, it might also raise concerns about corporate governance and financial transparency among investors.
The decision underscores the company's prioritization of cost management and operational bandwidth. Nevertheless, it’s important for investors to understand that this shift does not absolve the company from all regulatory scrutiny but could change the nature and intensity of oversight.
FORT MYERS, Fla., May 21, 2024 (GLOBE NEWSWIRE) -- American Oncology Network (“AON” or the “Company”) (Nasdaq: AONC), a rapidly growing network of community-based oncology practices, announced today its decision to voluntarily delist its Class A common stock and warrants from The Nasdaq Capital Market ("Nasdaq"). The Company’s decision to delist its securities from Nasdaq was recommended to the Board of Directors (the "Board") of the Company by a Special Committee (the "Special Committee") of the Board comprised solely of independent directors.
The Company intends to file a Form 25 with the Securities and Exchange Commission (the “SEC”) to delist its Class A common stock and warrants from Nasdaq and to deregister its Class A common stock and warrants under Section 12(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or about May 31, 2024, and as a result, the Company expects that the last trading day of its Class A common stock and warrants on Nasdaq will be on or about June 7, 2024.
In making its determination, the Special Committee concluded that delisting the Company’s securities from Nasdaq is in the best interests of the Company and its stakeholders. The Special Committee’s recommendation and the Board’s decision were the product of careful review and consideration of a number of factors, including, but not limited to, (1) the lack of research coverage of the Company by securities and industry analysts, (2) the lack of an active trading market for its securities on Nasdaq, and (3) the required personnel resources and expenses relating to continued Exchange Act and Nasdaq disclosure and reporting requirements and related regulatory burdens, which have resulted and would continue to result in significant operating expense and attention of the Company’s management team.
Todd Schonherz, Chief Executive Officer, commented, “AON has delivered an impressive five-year revenue CAGR of
Following the delisting of the Company’s common stock and warrants from Nasdaq, the Company expects that its common stock and warrants will be quoted for trading on a market operated by OTC Markets Group Inc. (the “OTC”) so that a trading market may continue to exist for such securities. There is no guarantee, however, that a broker will continue to make a market in the common stock and warrants.
About American Oncology Network
American Oncology Network (AON) (Nasdaq: AONC) is an alliance of physicians and seasoned healthcare leaders partnering to ensure the long-term success and viability of community oncology and other specialties. Founded in 2018, AON’s rapidly expanding network represents more than 240 providers practicing across 21 states. AON pioneers innovative healthcare solutions through its physician-led model, fostering value-based care that improves patient outcomes while reducing costs and expanding access to quality care. AON equips its network physicians with the tools they need to thrive independently while providing comprehensive support, integrated revenue-diversifying ancillary services, and practice management expertise, enabling physicians to focus on what matters most – providing the highest standard of care for every patient. AON is committed to promoting health equity by addressing disparities in cancer care and ensuring that all patients have access to the care they need to achieve optimal health outcomes. With a focus on innovation and collaboration, AON is shaping the future of community oncology. Learn more at www.AONcology.com.
Forward-Looking Statements
This press release contains forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements regarding the Company's strategy, intentions to voluntarily delist its securities from Nasdaq and any anticipated results of such actions. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking. These statements are based on current expectations as of the date of this press release and involve a number of risks and uncertainties, which may cause results to differ materially from those indicated by these forward-looking statements. Many important factors could cause actual future events to differ materially from the forward-looking statements in this press release, including, but not limited to, future liquidity of the Company's securities, the Company’s continued growth, changes in the Company's board of directors and executive management, and the Company's dependence on its executive management team. The foregoing list of factors is not exhaustive.
You should carefully consider the foregoing factors and the other risks and uncertainties described under the caption "Risk Factors" in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 28, 2024, as amended on April 29, 2024, and the Company's other filings with the SEC. These SEC filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and we assume no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. We do not give any assurance that we will achieve our expectations.
Investor Contact:
Solebury Strategic Communications
Investors@AONcology.com
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