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Earlyworks Co., Ltd. Received a Notification from NASDAQ Regarding Deficiency in Continued Listing Requirements

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Earlyworks (Nasdaq: ELWS) received a notification from NASDAQ on October 29, 2024, indicating non-compliance with the minimum Market Value of Listed Securities (MVLS) requirement. The company failed to maintain the required US$35 million MVLS threshold for 30 consecutive business days from September 17 to October 28, 2024. Earlyworks has been granted a 180-day compliance period until April 28, 2025, during which it must either achieve an MVLS of US$35 million for 10 consecutive business days or maintain shareholders' equity of at least US$2.5 million to avoid potential delisting.

Earlyworks (Nasdaq: ELWS) ha ricevuto una notifica da NASDAQ il 29 ottobre 2024, che indica la non conformità al requisito del valore di mercato delle securities elencate (MVLS). L'azienda non è riuscita a mantenere la soglia minima richiesta di 35 milioni di dollari USA di MVLS per 30 giorni lavorativi consecutivi dal 17 settembre al 28 ottobre 2024. Earlyworks ha ricevuto un periodo di conformità di 180 giorni fino al 28 aprile 2025, durante il quale deve raggiungere un MVLS di 35 milioni di dollari USA per 10 giorni lavorativi consecutivi oppure mantenere un patrimonio netto degli azionisti di almeno 2,5 milioni di dollari USA per evitare un possibile delisting.

Earlyworks (Nasdaq: ELWS) recibió una notificación de NASDAQ el 29 de octubre de 2024, indicando el incumplimiento del requisito del Valor de Mercado de Valores Listados (MVLS). La empresa no logró mantener el umbral mínimo requerido de 35 millones de dólares estadounidenses de MVLS durante 30 días hábiles consecutivos desde el 17 de septiembre hasta el 28 de octubre de 2024. Earlyworks ha recibido un período de cumplimiento de 180 días hasta el 28 de abril de 2025, durante el cual debe lograr un MVLS de 35 millones de dólares durante 10 días hábiles consecutivos o mantener un patrimonio de los accionistas de al menos 2,5 millones de dólares para evitar un posible deslistado.

Earlyworks (Nasdaq: ELWS)는 2024년 10월 29일 NASDAQ으로부터 상장된 증권의 최소 시장 가치(MVLS) 요건을 준수하지 않았다는 통지를 받았습니다. 이 회사는 2024년 9월 17일부터 10월 28일까지 30일 연속으로 3500만 달러의 MVLS 기준을 유지하지 못했습니다. Earlyworks는 2025년 4월 28일까지 180일의 준수 기간이 부여되었으며, 이 기간 동안 10일 연속으로 3500만 달러의 MVLS를 달성하거나 최소 250만 달러의 주주 지분을 유지해야 합니다. 그렇지 않으면 상장 폐지 가능성을 피하기 위해서입니다.

Earlyworks (Nasdaq: ELWS) a reçu une notification de la NASDAQ le 29 octobre 2024, indiquant son non-respect de l'exigence de valeur de marché des titres cotés (MVLS). L'entreprise n'a pas réussi à maintenir le seuil minimum requis de 35 millions de dollars US de MVLS pendant 30 jours de bourse consécutifs, du 17 septembre au 28 octobre 2024. Earlyworks a obtenu une période de conformité de 180 jours jusqu'au 28 avril 2025, au cours de laquelle elle doit soit atteindre un MVLS de 35 millions de dollars US pendant 10 jours de bourse consécutifs, soit maintenir un capital des actionnaires d'au moins 2,5 millions de dollars US pour éviter un éventuel retrait de la cote.

Earlyworks (Nasdaq: ELWS) erhielt am 29. Oktober 2024 eine Mitteilung von NASDAQ, dass die Mindestanforderung an den Marktwert notierter Wertpapiere (MVLS) nicht eingehalten wurde. Das Unternehmen hat es versäumt, die erforderliche MVLS-Schwelle von 35 Millionen US-Dollar für 30 aufeinanderfolgende Geschäftstage vom 17. September bis zum 28. Oktober 2024 aufrechtzuerhalten. Earlyworks wurde eine 180-tägige Frist zur Einhaltung bis zum 28. April 2025 gewährt, in der es entweder eine MVLS von 35 Millionen US-Dollar für 10 aufeinanderfolgende Geschäftstage erreichen oder ein Eigenkapital der Aktionäre von mindestens 2,5 Millionen US-Dollar aufrechterhalten muss, um eine mögliche Delistung zu vermeiden.

Positive
  • None.
Negative
  • Failed to maintain minimum MVLS requirement of US$35 million
  • Risk of potential delisting from NASDAQ if compliance not achieved by April 28, 2025
  • Market value declined below required threshold for 30 consecutive business days

Insights

This NASDAQ compliance issue raises significant concerns for ELWS investors. With a market cap of only $8.4 million, the company is substantially below the required $35 million MVLS threshold. The 180-day compliance window provides some breathing room, but achieving a 316% increase in market value by April 2025 presents a formidable challenge in current market conditions.

Two paths to compliance exist: either reaching the MVLS requirement or meeting the $2.5 million shareholders' equity threshold. The latter might be more achievable but would likely require significant capital raising, potentially leading to dilution. The risk of delisting is substantial, which could severely impact liquidity and institutional investment capability. Investors should closely monitor any strategic initiatives or corporate actions announced by management to address this deficiency.

TOKYO, Nov. 04, 2024 (GLOBE NEWSWIRE) -- Earlyworks Co., Ltd. (Nasdaq: ELWS) (the “Company” or “Earlyworks”) announced today that it received a notification (the “Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“NASDAQ”) on October 29, 2024, indicating that the Company is not currently in compliance with the minimum Market Value of Listed Securities (“MVLS”) requirement as set forth in NASDAQ’s continued listing standards for the Nasdaq Capital Market.

NASDAQ Listing Rule 5550(b)(2) requires companies to maintain a minimum MVLS of US$35 million, and NASDAQ Listing Rule 5810(c)(3)(C) specifies that a deficiency occurs if the MVLS falls below this threshold for 30 consecutive business days. Based on the Company’s MVLS for the 30 consecutive business days from September 17, 2024, to October 28, 2024, the Company no longer meets this requirement.

This Notice does not affect the listing or trading of the Company’s securities at this time. The Company continues to explore options to restore the market value to meet the required threshold.

Pursuant to NASDAQ Listing Rule 5810(c)(3)(C), the Company has been granted a 180-calendar-day compliance period, which expires on April 28, 2025. If, during this period, the Company’s MVLS closes at or above US$35 million for at least 10 consecutive business days, NASDAQ will notify the Company of its compliance, and the matter will be closed. Alternatively, if the Company satisfies the equity standard as set forth in NASDAQ Listing Rule 5550(b)(1), which requires the shareholders' equity of at least US$2.5 million, the Company will be able to regain compliance with the NASDAQ’s continued listing standards for the Nasdaq Capital Market.

If the Company is unable to regain compliance with the applicable NASDAQ Listing Rules by the end of the compliance period, it will receive a written notice that its securities are subject to delisting.

Earlyworks remains committed to meeting NASDAQ’s continued listing requirements and will take appropriate actions within the specified period to regain compliance.

About Earlyworks Co., Ltd.
Earlyworks Co., Ltd. is a Japanese company operating its proprietary private blockchain technology, GLS, to leverage blockchain technology in various applications in a wide range of industries. GLS is a hybrid blockchain that combines the technical advantages of blockchain and database technology. GLS features high-speed processing, which can reach 0.016 seconds per transaction, tamper-resistance, security, zero server downtime, and versatile applications. The applicability of GLS is verified in multiple domains, including real estate, advertising, telecommunications, metaverse, and financial services. The Company’s mission is to keep updating GLS and make it an infrastructure in the coming Web3/metaverse-like data society. For more information, please visit the Company’s website: https://ir.e-arly.works/.

For more information, please visit the Company’s website: https://ir.e-arly.works/.

For inquiries about this release, please contact:
Earlyworks Co., Ltd.
Contact E-MAIL: ew-ir@e-arly.works

Forward-Looking Statements
Certain statements in this announcement are 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 find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may,” or other 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 in the Company’s registration statement and other filings with the SEC.


FAQ

Why did Earlyworks (ELWS) receive a NASDAQ deficiency notice on October 29, 2024?

Earlyworks received the notice because its Market Value of Listed Securities (MVLS) fell below the required US$35 million threshold for 30 consecutive business days from September 17 to October 28, 2024.

What must Earlyworks (ELWS) do to regain NASDAQ compliance by April 28, 2025?

Earlyworks must either achieve an MVLS of US$35 million for 10 consecutive business days or maintain shareholders' equity of at least US$2.5 million.

What happens if Earlyworks (ELWS) fails to meet NASDAQ requirements by April 28, 2025?

If Earlyworks fails to meet the requirements by April 28, 2025, it will receive a written notice that its securities are subject to delisting from NASDAQ.

Earlyworks Co., Ltd. American Depositary Shares

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