PolyPid Announces Receipt of Nasdaq Notification of Minimum Stockholders’ Equity Non-Compliance

Rhea-AI Summary

PolyPid has received notification from Nasdaq of non-compliance with minimum stockholders' equity requirement, as it failed to maintain the required $2.5 million threshold, reporting approximately $2.158 million as of September 30, 2024. The company has until January 9, 2025, to submit a compliance plan, with potential extension up to 180 days if accepted. Trading continues under 'PYPD'. The company anticipates results from SHIELD II Phase 3 trial in December 2024, with potential additional funding of $18.5 million from January PIPE and $6.1 million from August PIPE warrants, contingent on positive trial outcomes.

Positive

• Potential to secure up to $24.6 million through warrant exercises if trial results are positive
• Ongoing SHIELD II Phase 3 trial results expected in December 2024
• Trading continues on Nasdaq during compliance period

Negative

• Failed to maintain minimum $2.5M stockholders' equity requirement (reported $2.158M)
• Risk of Nasdaq delisting if compliance plan isn't accepted or executed
• Additional funding dependent on positive trial results and warrant exercises

Insights

Financial Analyst

This Nasdaq non-compliance notification represents a significant concern for PolyPid, with stockholders' equity falling below the required $2.5 million threshold to $2.16 million. The company's path to compliance hinges heavily on the upcoming SHIELD II Phase 3 trial results in December 2024 and subsequent warrant exercises that could potentially bring in up to $24.6 million.

The situation creates substantial uncertainty for investors. While the 45-day compliance plan submission window and potential 180-day extension provide some breathing room, the company's ability to maintain its Nasdaq listing depends on either securing additional capital or achieving positive trial results that trigger warrant exercises. The risk of delisting could significantly impact stock liquidity and institutional investment accessibility if compliance isn't achieved.

PETACH TIKVA, Israel, Nov. 29, 2024 (GLOBE NEWSWIRE) -- PolyPid Ltd. (Nasdaq: PYPD) (“PolyPid” or the “Company”), a late-stage biopharma company aiming to improve surgical outcomes, today announced that it has received a written notification (the "Notification Letter") from the Listing Qualifications staff of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it is no longer in compliance with the minimum stockholders' equity requirement for continued listing on the Nasdaq Capital Market, listing Rule 5550(b)(1), due to its failure to maintain a minimum of $2,500,000 in stockholders' equity. In the Company's Form 6-K dated November 13, 2024, the Company reported stockholders' equity of approximately $2,158,000 as of September 30, 2024.

In accordance with Nasdaq rules, the Company has 45 calendar days, or until January 9, 2025, to submit a plan to regain compliance. If the plan is accepted, Nasdaq can grant an extension of up to 180 calendar days from the date of the letter to evidence compliance. The Notification Letter has no immediate effect on the Company’s listing on the Nasdaq Capital Market, and during the grace period, as may be extended, the Company’s ordinary shares will continue to trade on Nasdaq under the symbol “PYPD”.

Outcome of the unblinded interim analysis in Company’s ongoing SHIELD II Phase 3 trial evaluating D-PLEX₁₀₀ for the prevention of abdominal colorectal surgical site infections is expected in December 2024. Under the terms of the Company’s private placement financing that closed in January 2024 (“January PIPE”), the Company has the potential to secure an additional $18.5 million if the unblinded interim analysis results in the stopping of the trial due to positive efficacy and all warrants are exercised. In addition, under the terms of the private placement financing that closed in August 2024 (“August PIPE”), the Company has the potential to secure an additional $6.1 million if the unblinded interim analysis results in either the stopping of the trial due to positive efficacy, or continuation to planned patient recruitment (up to 630 subjects) and all warrants are exercised. The Company expects that it will be able to demonstrate compliance with the Nasdaq stockholders’ equity requirement if warrants issued under the January PIPE and the August PIPE are exercised.

About PolyPid

PolyPid Ltd. (Nasdaq: PYPD) is a late-stage biopharma company aiming to improve surgical outcomes. Through locally administered, controlled, prolonged-release therapeutics, PolyPid’s proprietary PLEX (Polymer-Lipid Encapsulation matriX) technology pairs with Active Pharmaceutical Ingredients (APIs), enabling precise delivery of drugs at optimal release rates over durations ranging from several days to months. PolyPid’s lead product candidate D-PLEX₁₀₀ is in Phase 3 clinical trial for the prevention of abdominal colorectal surgical site infections. In addition, the Company is currently in preclinical stages to test the efficacy of OncoPLEX for the treatment of solid tumors, beginning with glioblastoma.
For additional Company information, please visit http://www.polypid.com and follow us on Twitter and LinkedIn.

Forward-looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act and other securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. For example, the Company is using forward-looking statements when it discusses regaining compliance with Nasdaq’s continued listing requirements, the timing and effect thereof, and Company’s expectation that if warrants issued in the January PIPE and August PIPE are exercised, the Company will be able to demonstrate compliance with the Nasdaq stockholders’ equity requirement. Forward-looking statements are not historical facts, and are based upon management’s current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements. For a more detailed description of the risks and uncertainties affecting the Company, reference is made to the Company’s reports filed from time to time with the Securities and Exchange Commission, including, but not limited to, the risks detailed in the Company’s Annual Report on Form 20-F filed on March 6, 2024. Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements.

References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release. PolyPid is not responsible for the contents of third-party websites.

Contacts:
PolyPid Ltd. 
Ori Warshavsky
COO – US
908-858-5995
IR@Polypid.com

Investors:
Brian Ritchie
LifeSci Advisors
212-915-2578
BRitchie@lifesciadvisors.com

FAQ

What is PolyPid's current stockholders' equity as reported on November 29, 2024?

PolyPid reported stockholders' equity of approximately $2,158,000 as of September 30, 2024, which is below Nasdaq's minimum requirement of $2,500,000.

When does PolyPid (PYPD) need to submit its compliance plan to Nasdaq?

PolyPid must submit its plan to regain compliance to Nasdaq by January 9, 2025, which is 45 calendar days from the notification date.

How much additional funding could PolyPid (PYPD) secure from its PIPE warrants?

PolyPid could secure up to $18.5 million from January PIPE warrants and $6.1 million from August PIPE warrants, totaling $24.6 million, contingent on positive trial results and warrant exercises.