BAIYU Holdings Files Nasdaq Delisting Appeal Notice and Advances Recently Announced Projects

Rhea-AI Summary

BAIYU Holdings (Nasdaq: BYU) has filed an appeal against Nasdaq's decision to delist its securities. The delisting decision was based on concerns about recent disclosures regarding a contract for electric lithium batteries and a letter of intent for EV charging stations in Cairo. BAIYU argues that Nasdaq did not fully consider all relevant facts.

The company is advancing two recently announced projects: a contract for electric lithium batteries with a U.S.-based auto parts supplier and a letter of intent for EV charging stations in Cairo, Egypt. These projects align with BAIYU's expansion into clean energy initiatives.

CEO Renmei Ouyang stated that the company is committed to pursuing its business strategy and maximizing shareholder value. BAIYU's stock will remain listed on Nasdaq pending the appeal outcome, but there is no guarantee of continued listing.

Positive

• BAIYU is advancing two significant projects in the clean energy sector
• The company's stock remains listed on Nasdaq pending the appeal outcome
• BAIYU continues to be current with SEC filings and maintains registration of its securities

Negative

• Nasdaq has decided to delist BAIYU's securities due to concerns about recent disclosures
• There is no guarantee that BAIYU's appeal for continued listing will be successful
• The delisting decision may negatively impact investor confidence and stock performance

Insights

Legal Expert

This delisting appeal is a critical juncture for BAIYU Holdings. The company faces serious allegations from Nasdaq regarding the adequacy of due diligence in recent transactions and unusual trading activity. These concerns strike at the heart of corporate governance and transparency issues.

The retention of experienced securities counsel Jacob Frenkel suggests BAIYU is taking this matter seriously. However, the burden of proof will be on the company to demonstrate that Nasdaq's concerns are unfounded. The outcome of this appeal could have significant implications for BAIYU's access to capital markets and investor confidence.

While the company asserts no promotional activities or insider trading occurred, the unusual stock activity following recent announcements will likely be scrutinized closely. BAIYU's ability to provide evidence of proper due diligence and explain the market reaction will be important to their appeal.

Investors should be cautious, as a negative outcome could result in delisting, potentially impacting liquidity and valuation. Even if successful, this process may cast a shadow over the company's reputation and governance practices.

Financial Analyst

BAIYU's situation presents significant risks for investors. The potential delisting from Nasdaq could severely impact the stock's liquidity and valuation. While the company remains optimistic about its appeal, the uncertainty surrounding this process is likely to weigh heavily on investor sentiment.

The company's recent pivot into clean energy projects, particularly the lithium battery contract and EV charging stations in Egypt, represents a major strategic shift. However, Nasdaq's concerns about due diligence raise questions about the viability and execution of these projects. Investors should carefully evaluate the company's ability to successfully enter these new markets, especially given the regulatory scrutiny.

BAIYU's small market cap of $50,444,687 makes it particularly vulnerable to market volatility during this uncertain period. The stock may experience significant price swings as more information about the appeal process becomes available. Conservative investors might consider reducing exposure until there's more clarity on the listing status and the company's ability to execute its new strategic initiatives.

SHENZHEN, China, Oct. 8, 2024 /PRNewswire/ -- BAIYU Holdings, Inc. (Nasdaq: BYU) (the "Company" or "BAIYU"), a leading B2B bulk commodity e-commerce platform and supply chain service provider, today announced that it has filed timely a formal notice of appeal to a Hearings Panel of a Nasdaq Stock Market Listing Qualifications Staff's determination to delist the Company's securities from Nasdaq pursuant to Nasdaq Listing Rules 5101 and IM-5101-1. Following the receipt of notification from Nasdaq on October 4th, BAIYU determined to appeal the decision and intends to maintain that the Staff did not consider all relevant facts in making its delisting decision. BAIYU has retained Jacob Frenkel, Dickinson Wright, PLLC, as its lead counsel in the appeal.

The Nasdaq Staff based its delisting decision on concerns relating to the substance and timing of the Company's recent disclosures regarding a contract for the sale of electric lithium batteries to be purchased from a U.S.-based auto supplier and a letter of intent to build and operate electric vehicle charging stations in Cairo, Egypt. The Nasdaq Staff's articulated concerns relate to the adequacy of the Company's due diligence in the transactions and what it considered unusual trading activity in the Company's common stock following the announcements. The Company has not conducted any marketing or promotional campaigns regarding the Company's stock during the calendar years of 2023 and 2024, and no company officer or director traded BAIYU stock in August, September or October 2024.

Renmei Ouyang, CEO of BAIYU, commented, "We are appealing the Nasdaq Staff's recent action because we believe that the Staff had not considered fully and appreciated the scope of work of the Company's dedicated management to secure these two significant opportunities. These two projects are natural extensions of the Company's bulk commodities trading business and align perfectly with our recent expansion into clean energy projects, including battery-charging stations. We are a company that lets the quality of our people, our experience and business plan speak for themselves."

In connection with the Company's announcement on August 29, 2024 of a purchase and sales contract for electric lithium batteries with a U.S.-based auto parts supplier, the Company continues to take steps to put in place the complementary and component elements of the transaction. The contract represents the official debut of the Company's proprietary lithium battery brand into the United States market, advancing its strategic positioning in the new energy sector. Separately, in connection with the Company's announcement on September 4, 2024 of the entry into a letter of intent, through one of the Company's subsidiaries with a Cairo, Egypt-based company to cooperate in the construction and operation of charging and swapping stations in Cairo, the Company also continues to take steps advancing the objective of entering into a definitive agreement.  Those collaborative efforts are ongoing.

Ouyang further stated that "management's prioritization of expanding the Company's business footprint and building shareholder value should result in favorable consideration by Nasdaq in our appeal." Nevertheless, the Company acknowledges that it cannot predict the outcome of the appeal. Ouyang added that "we are committed to advancing expeditiously our efforts to maximize shareholder opportunities and value and pursue our business strategy uninterrupted."

BAIYU anticipates that its common stock will remain listed on the Nasdaq pending the outcome of the hearing and subsequent decision by a hearings panel. There can be no assurance that the panel will grant the Company's request for continued listing.  Meanwhile, the Company continues to be current with its filings of periodic reports with the Securities and Exchange Commission, and expects to maintain the registration of its securities under the Securities Exchange Act of 1934, as amended. Moreover, the Nasdaq Staff's notice of determination of delisting does not affect the Company's business operations, financial position, or ability to meet all financial obligations to partners and other counterparties.

BAIYU remains committed to its diverse corporate mission with its focus on energy by continuing to develop and provide clean energy alternatives. For more information on BAIYU's ongoing initiatives and corporate developments, please visit www.baiyuglobal.com. 

About BAIYU Holdings, Inc.

BAIYU Holdings, Inc. (NASDAQ: BYU) is a leading B2B bulk commodity e-commerce platform and supply chain service provider. Its commodities trading business primarily involves purchasing non-ferrous metal products from upstream metal and mineral suppliers and then selling to downstream customers. Its supply chain service business primarily has served as a one-stop commodity supply chain service and digital intelligence supply chain platform integrating upstream and downstream enterprises, warehouses, logistics, information, and futures. Currently, the Company is in the process of expanding its business into clean energy, smart power, intelligent photovoltaic, and the operation and maintenance of fast-charging station outlets. To learn more about our work, please visit www.baiyuglobal.com. 

Forward-Looking Statements

This press release contains "forward-looking statements." These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "could," "would," "should," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "propose," "potential," "continue," "approximates," "assesses," "hopes," "projects," "intends," or similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct; and, the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results described in the Company's "Risk Factors" section and other sections in its most recent Annual Report on Form 10-K, and subsequent quarterly and other filings with the United States Securities and Exchange Commission.

Contacts

BAIYU Holdings, Inc.
Room 3703, Jingji Binhe Times Building, Binhe Avenue, Futian District
Shenzhen, Guangdong
People's Republic of China
518000

For media inquiries regarding the subject of this press release, please contact:
Jacob S. Frenkel, Esq.
Dickinson Wright PLLC
Email: jfrenkel@dickinsonwright.com  

For investor and media inquiries, please contact:

BAIYU Holdings, Inc.
Investor Relations Department
Email: ir@baiyuglobal.com  

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SOURCE BAIYU Holdings, Inc.

FAQ

Why is BAIYU Holdings (BYU) appealing Nasdaq's delisting decision?

BAIYU Holdings (BYU) is appealing Nasdaq's delisting decision because they believe the Staff did not fully consider all relevant facts regarding their recent disclosures about a lithium battery contract and EV charging stations project in Cairo.

What are the two major projects BAIYU Holdings (BYU) recently announced?

BAIYU Holdings (BYU) recently announced a contract for electric lithium batteries with a U.S.-based auto parts supplier and a letter of intent to build and operate EV charging stations in Cairo, Egypt.

Will BAIYU Holdings (BYU) stock remain listed on Nasdaq during the appeal process?

Yes, BAIYU Holdings (BYU) stock is expected to remain listed on Nasdaq pending the outcome of the appeal and the subsequent decision by a hearings panel. However, continued listing is not guaranteed.

How does the Nasdaq delisting notice affect BAIYU Holdings' (BYU) business operations?

The Nasdaq delisting notice does not affect BAIYU Holdings' (BYU) business operations, financial position, or ability to meet financial obligations to partners and other counterparties.