Nerdy Announces Receipt of Notice From NYSE

Rhea-AI Summary

Nerdy (NYSE: NRDY) has received a notice from the NYSE on November 12, 2024, indicating non-compliance with listing criteria due to its Class A Common Stock average closing price falling below $1.00 over 30 consecutive trading days. The company has a six-month cure period to regain compliance by achieving a closing share price of at least $1.00 and maintaining that average over 30 trading days. Nerdy is considering various options, including a potential reverse stock split requiring stockholder approval. The company reports $65.0 million in cash and no debt, maintaining normal business operations and SEC reporting requirements while remaining listed on NYSE during this period.

Positive

• Strong cash position of $65.0 million with no debt
• Company maintains normal NYSE listing during cure period
• Multiple options available to cure stock price deficiency

Negative

• Stock trading below $1.00, risking NYSE delisting
• Potential reverse stock split may be necessary
• Need for stockholder approval for remedial actions

Insights

Financial Analyst

The NYSE delisting notice represents a significant challenge for Nerdy. While the $65.0 million cash position and zero debt provide some stability, the sub-dollar stock price reflects deeper market concerns about the company's valuation and future prospects. A potential reverse stock split, while maintaining technical compliance, wouldn't address underlying business fundamentals.

The six-month compliance window provides breathing room, but historical patterns show companies receiving delisting notices often struggle to organically maintain the $1.00 threshold even after implementing reverse splits. The market cap of just $89 million suggests significant investor skepticism about Nerdy's growth trajectory and path to profitability in the competitive edtech space.

ST. LOUIS--(BUSINESS WIRE)-- Nerdy Inc. (NYSE: NRDY) today announced that it received a notice from the New York Stock Exchange ("NYSE") on November 12, 2024 that it is not in compliance with the continued listing criteria under Section 802.01C of the NYSE Listed Company Manual because the average closing price of the Company's Class A Common Stock was less than $1.00 over a consecutive 30 trading-day period.

The Company plans to notify the NYSE by November 12, 2024 that it intends to cure the stock price deficiency and to return to compliance with the NYSE continued listing standard. The Company can regain compliance at any time within the six-month period following receipt of the NYSE notice if on the last trading day of any calendar month during the cure period the Company has a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the 30 trading-day period ending on the last trading day of that month.

The Company intends to consider available alternatives, including, but not limited to, a reverse stock split, subject to stockholder approval no later than at the Company’s next annual meeting of stockholders, if necessary to cure the stock price non-compliance. Under the NYSE’s rules, if the Company determines that it will cure the stock price deficiency by taking an action that will require stockholder approval at its next annual meeting of stockholders, the price condition will be deemed cured if the price promptly exceeds $1.00 per share, and the price remains above that level for at least the following 30 trading days.

The notice is not anticipated to impact the ongoing business operations of the Company or its reporting requirements with the U.S. Securities and Exchange Commission. The Company’s Class A Common Stock will continue to be listed and trade on the NYSE during this period, subject to the Company’s compliance with other NYSE continued listing standards.

We ended the third quarter with $65.0 million of cash on our balance sheet and no debt, which we believe provides ample liquidity to fund the business and pursue growth initiatives.

Forward-Looking Statements

All statements contained herein that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding our plans and intentions to consider alternatives to cure the NYSE continued listing requirement deficiency; as well as statements that include the words “expect,” “plan,” “believe,” “project,” and “may,” and similar statements of a future or forward-looking nature. The forward-looking statements made herein relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. There are a significant number of factors that could cause actual results to differ materially from statements made herein or in connection herewith, including but not limited to, our limited operating history, which makes it difficult to predict our future financial and operating results; our history of net losses; risks associated with our ability to acquire and retain customers, operate, and scale up our Consumer and Institutional businesses; risks associated with our intellectual property, including claims that we infringe on a third-party’s intellectual property rights; risks associated with our classification of some individuals and entities we contract with as independent contractors; risks associated with the liquidity and trading of our securities; risks associated with payments that we may be required to make under the tax receivable agreement; litigation, regulatory and reputational risks arising from the fact that many of our Learners are minors; changes in applicable law or regulation; the possibility of cyber-related incidents and their related impacts on our business and results of operations; risks associated with the development and use of artificial intelligence and related regulatory uncertainty; the possibility that we may be adversely affected by other economic, business, and/or competitive factors; and risks associated with managing our rapid growth. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in our filings with the SEC, including our Annual Report on Form 10-K filed on February 27, 2024, as well as other filings that we may make from time to time with the SEC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241112415821/en/

Investor Relations

investors@nerdy.com

Source: Nerdy Inc.

FAQ

Why did Nerdy (NRDY) receive a notice from NYSE?

Nerdy received a notice from NYSE on November 12, 2024, because its Class A Common Stock average closing price was below $1.00 over a consecutive 30 trading-day period, violating NYSE listing requirements.

How can Nerdy (NRDY) regain NYSE compliance?

Nerdy can regain compliance within six months if it achieves a closing share price of at least $1.00 and maintains that average over a 30 trading-day period, or through actions like a reverse stock split with stockholder approval.

What is Nerdy's (NRDY) current financial position?

Nerdy reports having $65.0 million in cash on its balance sheet with no debt, providing sufficient liquidity to fund operations and growth initiatives.