ETAO International Co. Ltd. Received Nasdaq Delisting Determination

Rhea-AI Summary

ETAO International Co. Ltd. (NASDAQ: ETIC) received a staff determination letter from Nasdaq, notifying the company of the determination to delist its securities due to non-compliance with the bid price requirement. Unless an appeal is requested, trading of the company's ordinary shares will be suspended on December 22, 2023.

Positive

• None.

Negative

• The company received a staff determination letter from Nasdaq, indicating the possibility of delisting due to non-compliance with the bid price requirement, which could negatively impact investor confidence and stock performance.

Insights

Financial Analyst

The notification of delisting received by ETAO International Co. Ltd. from Nasdaq is a significant event with material implications for the company's financial standing and investor relations. The failure to meet the bid price requirement demonstrates a prolonged period of underperformance in the company's stock value, which may be indicative of deeper financial or operational issues. Investors typically perceive delisting as a negative signal, potentially leading to a decrease in investor confidence and a reduction in liquidity as the stock moves to over-the-counter markets.

It is crucial to evaluate the company's strategic plan to address the non-compliance with Nasdaq's requirements. If the appeal to the Hearings Panel is successful and ETAO presents a viable plan to regain compliance, there may be potential for stock recovery. However, the uncertainty surrounding the appeal process and the effectiveness of the corrective measures could continue to impact the stock's performance negatively in the short term.

In layman's terms, ETAO is facing a challenge that could either lead to a turnaround if they convince the Panel of their plan or result in further decline if they fail to do so. Investors should closely monitor the company's subsequent actions and the Panel's decision for indications of the company's future direction.

Legal Expert

The issuance of a staff determination letter by Nasdaq to ETAO International Co. Ltd. is a procedural step in enforcing listing standards that protect investors and maintain fair and orderly markets. The delisting process is subject to specific rules outlined in the Nasdaq Listing Rule 5800 Series and ETAO's right to appeal provides a due process opportunity to address the deficiencies cited by Nasdaq.

From a legal standpoint, the company's proactive disclosure in compliance with Nasdaq Listing Rule 5810(b) is a critical aspect of maintaining transparency with stakeholders. The outcome of the appeal and the company's ability to present a compelling plan to regain compliance will be pivotal in determining its continued listing status. The legal ramifications of delisting include potential impacts on contractual obligations, investor relations and financing options. These aspects must be carefully managed to mitigate adverse effects on the company's operations and strategic objectives.

Explained simply, ETAO is navigating a legal process to maintain its presence on a major stock exchange, which is crucial for its ability to attract investment and maintain shareholder value. The company's ability to articulate and execute a compliance plan will be under scrutiny by both the Panel and the market.

Stock Market Analyst

The delisting notice for ETAO International Co. Ltd. from Nasdaq is a significant indicator of market sentiment and the perceived value of the company. Delisting often results in a stock being traded on less-regulated markets, which can lead to increased volatility and decreased institutional investor interest. For market participants, this event may trigger a reassessment of the company's risk profile and investment potential.

Furthermore, the company's stock price could be subject to increased selling pressure as institutional investors who are mandated to invest in listed securities may be forced to divest. The broader market impact of such a delisting could also reflect on peer companies and the industry sector, potentially affecting comparative valuations.

In simpler terms, ETAO's stock market troubles are a red flag for investors, signaling possible risk and uncertainty. The company's ability to reverse the delisting decision will be closely watched as an indicator of its resilience and potential for future growth.

NEW YORK, Dec. 18, 2023 /PRNewswire/ -- ETAO International Co. Ltd. announced today that it received a staff determination letter (the "Letter"), on December 13, 2023, from the Listing Qualifications Department of The Nasdaq Stock Market LLC ("Nasdaq") notifying the Company of the determination from the Nasdaq staff (the "Staff") to delist the Company's securities from The Nasdaq Stock Market, because, as of December 11, 2023, the Company has not regained compliance with the bid price requirement as set forth Listing Rule 5550(a)(2) and is not eligible for a second 180 day period.

ETAO International Co. Ltd. Received Nasdaq Delisting Determination

Pursuant to the Letter, unless the Company requests an appeal of the Staff's determination, trading of the Company's ordinary shares will be suspended at the opening of business on December 22, 2023, and a Form 25-NSE will be filed with the Securities and Exchange Commission (the "SEC"), which will remove the Company's securities from listing and registration on The Nasdaq Stock Market.

The Notice states that the Company may appeal Staff's determination to a Hearings Panel (the "Panel") pursuant to the procedures set forth in the Nasdaq Listing Rule 5800 Series. A hearing request will stay the suspension of the Company's securities and the filing of the Form 25-NSE pending the Panel's decision. The Company intends to request a hearing to appeal the delisting determination. The Company is working on a plan to present to the Panel in an effort to regain compliance with the Listing Rules.

This announcement is made in compliance with Nasdaq Listing Rule 5810(b), which requires prompt disclosure of receipt of a deficiency notification.

About ETAO International Group

ETAO International Group ("ETAO"), a Cayman Islands company, aims to be the leading digital healthcare group providing telemedicine, hospital care, primary care, pharmacy, and health insurance covering all life stages of patients. ETAO became a public company listed in Nasdaq through merging with Mountain Crest Acquisition Corp. III (MCAE) on Feb 21, 2023. "ETAO" brand means "Best Medical Way" with transformative medical care and unparalleled service. As a holding company with no material operations of its own, ETAO conducts substantially all of the operations through five variable interest entities ("VIEs") located in China, which have entered into a series of the VIE Agreements with certain indirect subsidiaries of ETAO. For accounting purposes, ETAO is the primary beneficiary of the VIEs' business operations through the VIE Agreements, which enable ETAO to consolidate the financial results in its consolidated financial statements under U.S. GAAP for four of the VIEs and for the one remaining VIE, in which ETAO does not own a majority interest, its financial statements will not be consolidated with the financial statements of ETAO. ETAO aims to provide best-in-class internet medical services, such as artificial intelligence and big data technologies, to improve health care delivery and quality in specialized clinics and hospital settings. ETAO is in the process of building a platform that is seamlessly integrated based on its ability to combine technology and health sciences.

Media Contact: Wilson Liu, Tel: 347-306-5134, Email: wilson.liu@etao.world

Safe Harbor Statement

Certain statements made in this release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, are: the ability to manage growth; ability to identify and integrate other future acquisitions; ability to obtain additional financing in the future to fund capital expenditures; fluctuations in general economic and business conditions; costs or other factors adversely affecting our profitability; litigation involving patents, intellectual property, and other matters; potential changes in the legislative and regulatory environment; a pandemic or epidemic. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in the Company's filings with the Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Such information speaks only as of the date of this release.

View original content:https://www.prnewswire.com/news-releases/etao-international-co-ltd-received-nasdaq-delisting-determination-302018258.html

SOURCE ETAO International Co., Ltd.

FAQ

What is the reason behind ETAO International Co. Ltd.'s potential delisting from Nasdaq?

The company received a staff determination letter from Nasdaq, indicating non-compliance with the bid price requirement as the reason for potential delisting.

When will trading of ETAO International Co. Ltd.'s ordinary shares be suspended?

Trading of the company's ordinary shares will be suspended at the opening of business on December 22, 2023, unless an appeal is requested.

What is the next step for ETAO International Co. Ltd. after receiving the staff determination letter?

The company intends to request a hearing to appeal the delisting determination and is working on a plan to present to the Panel in an effort to regain compliance with the Listing Rules.

What is the Nasdaq Listing Rule 5810(b) compliance requirement that prompted this announcement?

The announcement is made in compliance with Nasdaq Listing Rule 5810(b), which requires prompt disclosure of receipt of a deficiency notification.