Nano Labs Announces Receipt of Deficiency Letters from Nasdaq

Rhea-AI Summary

Nano Labs announced it received a deficiency letter from Nasdaq on July 11, 2024, stating it is no longer in compliance with Nasdaq Listing Rule 5450(b)(2)(C). The company’s Market Value of Publicly Held Shares (MVPHS) has fallen below the required $15 million. Although this does not result in immediate delisting, Nano Labs has 180 days, until January 7, 2025, to regain compliance by maintaining an MVPHS of at least $15 million for 10 consecutive business days. The management is exploring options to meet the requirements and retain its Nasdaq listing. The announcement complies with Nasdaq Listing Rule 5810(b) mandating prompt disclosure of such notifications.

Positive

• None.

Negative

• Nano Labs received a deficiency letter from Nasdaq for failing to maintain a minimum MVPHS of $15 million.
• The company has 180 days, until January 7, 2025, to regain compliance, or face potential delisting from the Nasdaq Global Market.

Insights

Financial Analyst

Nano Labs' receipt of a deficiency letter from Nasdaq regarding its failure to maintain the minimum Market Value of Publicly Held Shares (MVPHS) of US$15.0 million is a critical event for both the company and its investors. If the company fails to regain compliance within the 180-day grace period, it risks being delisted from the Nasdaq Global Market. This could significantly impact investor confidence and the stock's liquidity.

For retail investors, understanding the MVPHS requirement is key. MVPHS refers to the total dollar value of shares available for public trading, excluding insider holdings. The deficiency indicates that investor interest and market perception of the company's value are currently low. This could be due to various underlying issues such as weak financial performance, operational challenges, or broader market conditions.

Investors should closely monitor how Nano Labs' management addresses this issue. Potential strategies might include corporate actions like share buybacks, issuing new announcements to boost investor confidence, or strategic partnerships. However, these actions must be carefully assessed for their long-term sustainability.

In the short term, the stock may experience increased volatility as the market reacts to this news. Longer-term implications depend on the company's ability to turn around market perception and achieve the required MVPHS. Investors should remain cautious and look for concrete steps from the management to address these challenges.

Market Research Analyst

From a market perspective, the deficiency letter highlights a significant concern about Nano Labs' current standing. The failure to maintain the required MVPHS suggests that the stock has not been attracting sufficient investor interest. This could be due to various factors such as competitive pressures in the integrated circuit design industry, potential technological lags, or macroeconomic factors affecting investor sentiment towards Chinese tech companies.

Investors should consider how Nano Labs' situation compares with industry norms. Other companies in this sector may also face MVPHS challenges, especially if they are smaller or navigating turbulent market conditions. However, a persistent inability to meet Nasdaq's listing requirements might indicate deeper issues specific to Nano Labs.

It's also essential to consider the broader market environment. Global investor sentiment towards Chinese companies can be influenced by geopolitical tensions, regulatory changes, or economic shifts. Stakeholders should analyze broader market trends to gauge how these external factors might impact Nano Labs' ability to regain compliance.

Overall, this news serves as a reminder for investors to stay informed about regulatory requirements and market conditions. Continual reassessment of the company's strategies and market position is important for making informed investment decisions.

HANGZHOU, China, July 12, 2024 /PRNewswire/ -- Nano Labs Ltd (Nasdaq: NA) ("we," the "Company" or "Nano Labs"), a leading fabless integrated circuit design company and product solution provider in China, today announced that it received a notification letter dated July 11, 2024 (the "Deficiency Letter") from the Listing Qualifications Department of The Nasdaq Stock Market Inc. (the "Nasdaq") notifying that the Company is no longer in compliance with the Nasdaq Listing Rule 5450(b)(2)(C) for continued listing due to its failure to maintain a minimum of Market Value of Publicly Held Shares ("MVPHS") of US$15.0 million.

The Deficiency Letter does not result in the immediate delisting of the Company's Class A ordinary shares on the Nasdaq Global Market. The Company has 180 calendar days from the date of the Deficiency Letters, or until January 7, 2025 (the "Compliance Period"), to regain compliance the minimum MVPHS requirement. If at any time during the Compliance Period, the Company's MVPHS is at least US$15.0 million for a minimum of 10 consecutive business days, Nasdaq will provide the Company with a written confirmation of compliance with the minimum MVPHS requirement, and the matter will be closed. The Company's management is looking into various options available to regain compliance and maintain its continued listing on the Nasdaq Global Market.

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

About Nano Labs Ltd

Nano Labs Ltd is a leading fabless integrated circuit ("IC") design company and product solution provider in China. Nano Labs is committed to the development of high throughput computing ("HTC") chips, high performance computing ("HPC") chips, distributed computing and storage solutions, smart network interface cards ("NICs") vision computing chips and distributed rendering. Nano Labs has built a comprehensive flow processing unit ("FPU") architecture which offers solution that integrates the features of both HTC and HPC. For more information, please visit the Company's website at: ir.nano.cn.

Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, the Company's plan to appeal the Staff's determination, which can be identified by terminology such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Risks and uncertainties that may cause such differences include, among other things: satisfaction of customary closing conditions related to the offering and the sale of the securities and Nano Lab's ability to complete the offering. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

For investor and media inquiries, please contact:
Nano Labs Ltd
Email: ir@nano.cn 

Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com

 

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SOURCE Nano Labs Ltd

FAQ

What did Nano Labs announce on July 12, 2024?

Nano Labs announced it received a deficiency letter from Nasdaq due to non-compliance with the minimum Market Value of Publicly Held Shares (MVPHS) requirement.

Why did Nano Labs receive a deficiency letter from Nasdaq?

Nano Labs received a deficiency letter because it failed to maintain a minimum MVPHS of $15 million as required by Nasdaq Listing Rule 5450(b)(2)(C).

What is the compliance period for Nano Labs to meet Nasdaq's MVPHS requirement?

Nano Labs has until January 7, 2025, to regain compliance with Nasdaq's MVPHS requirement.

What happens if Nano Labs fails to meet the MVPHS requirement within the compliance period?

If Nano Labs fails to meet the MVPHS requirement within the compliance period, it may face delisting from the Nasdaq Global Market.

What steps is Nano Labs taking to address the Nasdaq deficiency notice?

Nano Labs' management is exploring various options to regain compliance with Nasdaq's MVPHS requirement and maintain its listing on the Nasdaq Global Market.