Hempacco Announces Receipt of Nasdaq Delisting Notice and Submission of Appeal to Nasdaq
Hempacco (NASDAQ: HPCO) has announced the receipt of a Nasdaq delisting notice due to non-compliance with several listing rules. The company failed to hold an annual shareholder meeting within twelve months of its fiscal year-end and did not file its Annual Report for the year ending December 31, 2023, or its Quarterly Report for the quarter ending March 31, 2024.
On July 7, 2024, Hempacco submitted an appeal against the delisting and requested a hearing. This request temporarily stays the suspension or delisting action for 15 days. Hempacco is working to file the overdue reports and plans to hold the annual meeting soon.
- None.
- Hempacco received a Nasdaq delisting notice for non-compliance with listing rules.
- The company failed to file its Annual Report for the year ending December 31, 2023.
- The company also failed to file its Quarterly Report for the quarter ending March 31, 2024.
- Hempacco did not hold an annual shareholder meeting within the required twelve-month period.
Insights
The delisting notice from Nasdaq is a significant event for Hempacco Co., Inc., potentially impacting investor sentiment and the company's market position. Delisting can result in a substantial loss of investor confidence and liquidity. Investors often view a delisting notice as a red flag, indicating underlying operational or financial issues.
The company's failure to comply with Nasdaq's Annual Meeting Requirement and the delays in filing both the Annual Report on Form 10-K and the Quarterly Report on Form 10-Q suggest potential governance and administrative weaknesses. These filings are essential for transparency and investor trust. Investors should question why these delays occurred and if they indicate deeper systemic issues within the company.
Short-term, the appeal process and any subsequent delay in delisting provide a temporary reprieve. However, this is not a long-term solution. The company's emphasis on expeditiously filing the overdue reports is crucial. If Hempacco succeeds, it might restore some investor confidence, but failure to do so could reinforce perceptions of instability.
Long-term implications include restricted access to capital markets, as being listed on a major exchange like Nasdaq offers credibility and visibility. Delisting could make it harder for Hempacco to attract institutional investors, who often have mandates restricting investment in non-listed companies.
From a legal standpoint, Nasdaq's delisting notice is a serious compliance issue. Nadaq Listing Rule 5620(a) requires annual shareholder meetings within twelve months of the fiscal year-end to ensure proper governance and accountability. Rule 5250(c)(1) mandates timely filings with the SEC to maintain market integrity.
Hempacco's appeal and request for a hearing before a Nasdaq Hearings Panel temporarily stay the delisting process. However, these procedural moves are essentially buying time. The company must demonstrate compelling reasons for its non-compliance and a concrete plan to rectify these issues. Failure to do so will likely result in delisting, which could lead to further legal and financial repercussions, including shareholder lawsuits.
The company's proactive approach in addressing the appeal and planning to file the required reports shows effort but also hints at potential managerial and operational missteps that led to non-compliance in the first place.
San Diego, California--(Newsfile Corp. - July 8, 2024) - Hempacco Co., Inc. (NASDAQ: HPCO) ("Hempacco" or the "Company"), a vertically integrated hemp manufacturing company, announced today that on July 1, 2024, the Company received notice (the "Delisting Notice") from The Nasdaq Stock Market ("Nasdaq") that the Company's shares would be delisted since the Company had not regained compliance with the Nasdaq Annual Meeting Requirement described below, and because the Company had not filed its (i) Annual Report on Form 10-K for the year ended December 31, 2023 (the "Form 10-K"), and (ii) Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (the "Form 10-Q").
As previously announced, the Company received notices from Nasdaq indicating that, as a result of the Company not (i) holding an annual meeting of shareholders within twelve months of the end of the Company's fiscal year end, (ii) filing the Form 10-K, and (iii) filing the Form 10-Q, the Company was not in compliance with Rules 5620(a) and 5250(c)(1) of Nasdaq's Listing Rules (the "Listing Rules"), which require the Company to have an annual meeting of shareholders within twelve months of end of the Company's fiscal year end (the "Annual Meeting Requirement") and require the Company to timely file all periodic reports with the Securities and Exchange Commission (the "SEC").
On July 7, 2024, the Company submitted its appeal of Nasdaq's delisting determination and requested a hearing pursuant to the procedures set forth in the Listing Rules. The Listing Rules provide that the Company may request a hearing (the "Hearing Request") before a Nasdaq Hearings Panel (the "Panel"), and that the request will temporarily stay any suspension or delisting action for 15 days from the date of the Hearing Request. Further, the Listing Rules provide that, in its Hearing Request, the Company may request that the stay remain in effect through the hearing and the expiration of any additional extension period granted by the Panel. The Company submitted the Hearing Request on July 7, 2024, and made that extended stay request. While the determination on whether to grant the stay will be made by the Panel, the Company is focused on expeditiously filing the Form 10-K prior to the hearing and the Form 10-Q shortly thereafter, and the Company is planning to hold an annual shareholder meeting shortly thereafter as well.
About Hempacco
Hempacco Co., Inc.'s goal is Disrupting Tobacco's™ nearly
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the Company's beliefs and expectations relating to the filing of the Form 10-K and Form 10-Q, holding an annual shareholder meeting, its appeal submitted to Nasdaq and any delisting stay, and whether the Company's common stock will remain listed on Nasdaq. These forward-looking statements are based on the current beliefs and expectations of the Company's management with respect to future events, only speak as of the date that they are made and are subject to significant risks and uncertainties. Such statements can be identified by the use of words such as "future," "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "will," "would," "could," "continue," "can," "may," "look forward," "aim," "hopes," and similar terms, although not all forward-looking statements contain such words or expressions. Actual results could differ significantly from those set forth in the forward-looking statements.
Important factors that may cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, a further material delay in the Company's financial reporting, including as a result of unanticipated factors or factors that the Company currently believes will not cause further delay, the possibility that the ongoing review may identify errors or control deficiencies in the Company's accounting practices, the likelihood that the control deficiencies identified or that may be identified in the future will result in additional material weaknesses in the Company's internal control over financial reporting, the possibility that the Company is unable to regain compliance with, or thereafter continue to comply with, the Listing Rules, or experience violations of additional Listing Rules, the possibility that Nasdaq may deny the Company's appeal and delist the Company's securities, and other factors contained in the "Risk Factors" section and elsewhere in the Company's filings with the SEC from time to time, including, but not limited to, its Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q. The Company does not undertake to update any forward-looking statements to reflect changed assumptions, the impact of circumstances or events that may arise after the date of the forward-looking statements, or other changes over time, except as required by law.
For investor inquiries, please contact:
Sandro Piancone, CEO
Investor Relations: ir@hempaccoinc.com
619-779-0715
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/215923
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