SRIVARU Holding Limited Announces Receipt of Additional Nasdaq Delisting Notification and Submits Request for Hearing to Appeal

Rhea-AI Summary

SRIVARU Holding (Nasdaq: SVMH, SVMHW), a premium electric motorcycle manufacturer, has received an additional delisting notification from Nasdaq on July 30, 2024. The company failed to maintain the required minimum Market Value of Publicly Held Shares of $15,000,000 and minimum Market Value of Listed Securities of $50,000,000. This comes on top of a previous notification regarding the inability to maintain a minimum Bid Price of $1.00.

On July 31, 2024, SRIVARU submitted a request for a hearing with a Nasdaq Hearing Panel to appeal these determinations. The delisting process is now on hold, and the company's securities will continue trading on Nasdaq pending the Panel's decision. SRIVARU plans to present a comprehensive compliance plan at the hearing but acknowledges there's no guarantee of an extension or successful compliance within any granted period.

Positive

• Company's securities continue to trade on Nasdaq pending the Panel's decision
• SRIVARU has prepared a comprehensive plan to regain compliance with Nasdaq's listing requirements

Negative

• Received additional Nasdaq delisting notification for failing to meet minimum market value requirements
• Failed to maintain minimum Market Value of Publicly Held Shares of $15,000,000
• Failed to maintain minimum Market Value of Listed Securities of $50,000,000
• Previously failed to maintain minimum Bid Price of $1.00
• No assurance of securing an extension period or meeting compliance criteria if granted

Insights

Financial Analyst

SRIVARU Holding 's receipt of an additional delisting notification from Nasdaq is a significant red flag for investors. The company's failure to meet multiple listing requirements, including minimum bid price, market value of publicly held shares and market value of listed securities, indicates severe financial distress and market underperformance.

The company's request for a hearing to appeal the delisting decision is a standard procedure, but investors should be cautious about its effectiveness. While this move temporarily stays the delisting process, it's important to note that only 25% to 30% of companies successfully retain their listing after such appeals.

SRIVARU's commitment to present a "comprehensive plan" to regain compliance is positive, but the lack of specific details is concerning. Typically, such plans involve strategies like reverse stock splits, additional equity raises, or significant operational improvements. However, given the multiple compliance issues, the company likely faces an uphill battle.

Investors should be aware that even if SRIVARU secures an extension, the company must demonstrate substantial progress in a relatively short time frame, usually 180 days. This pressure could lead to dilutive actions or rushed strategic decisions that may not be in the best long-term interests of shareholders.

The potential delisting poses significant risks, including reduced liquidity, loss of institutional investor interest and difficulty in raising capital. These factors could further exacerbate SRIVARU's financial challenges, potentially creating a negative feedback loop.

Market Research Analyst

The delisting notification SRIVARU received highlights broader challenges in the electric vehicle (EV) market, particularly for niche players like premium electric motorcycle manufacturers. The company's struggle to maintain adequate market capitalization and share price reflects investor skepticism about its growth prospects and market positioning.

SRIVARU's difficulties come at a time when the global EV market is experiencing a slowdown in growth rates, with premium segments facing additional pressures due to economic uncertainties. This market context makes it even more challenging for SRIVARU to execute a turnaround plan that would satisfy Nasdaq's requirements.

The company's failure to maintain a $50,000,000 market value of listed securities is particularly telling. For context, this figure is relatively low for a public company, suggesting that SRIVARU has failed to capture significant investor interest or demonstrate a compelling growth story.

Moreover, the inability to maintain a $15,000,000 market value of publicly held shares indicates a lack of liquidity and potentially concentrated ownership, which can be red flags for institutional investors. This could create a vicious cycle where lack of investor interest leads to further price declines and liquidity issues.

SRIVARU's situation underscores the importance of robust financial planning and market positioning for EV startups. Companies in this space need not only innovative products but also a clear path to profitability and scale to maintain investor confidence in today's challenging market environment.

GRAND CAYMAN, Cayman Islands, July 31, 2024 (GLOBE NEWSWIRE) -- SRIVARU Holding Limited (Nasdaq: SVMH, SVMHW) (“SRIVARU” or the “Company”), a manufacturer of premium electric motorcycles today announced that on July 30, 2024, the Company received an additional staff determination letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company of the determination of the Nasdaq staff (the “Staff”) that because the Company had not regained compliance with the Nasdaq requirements to maintain (i) a minimum Market Value of Publicly Held Shares of $15,000,000, and (ii) a minimum Market Value of Listed Securities of $50,000,000 as set forth in Nasdaq Listing Rules 5450(b)(2)(A) and 5450(b)(2)(C), respectively, these matters serve as additional bases for delisting the Company’s securities from the Nasdaq Global Market.

On July 31, 2024, the Company submitted a request to Nasdaq for a hearing with a Hearing Panel (the “Panel”) to appeal the Staff’s determinations regarding its inability to maintain (i) a minimum Bid Price of $1.00, (ii) a minimum Market Value of Publicly Held Shares of $15,000,000, and (iii) a minimum Market Value of Listed Securities of $50,000,000 (collectively, the “Rules”), which will stay the delisting and the Company’s securities will continue to trade on Nasdaq pending the Panel’s decision.

At the hearing, SRIVARU is prepared to present a comprehensive plan to regain compliance with Nasdaq's listing requirements and is committed to working diligently within the plan to meet the necessary criteria. However, there is no assurance that the Company will secure an extension period from the Panel to achieve compliance, or, if granted, that it will meet the necessary criteria within the extension period.

About SRIVARU 

SRIVARU Holding Limited, a Cayman Islands exempted company, is the parent company of SRIVARU Motor Private Ltd., a commercial-stage provider dedicated to designing and manufacturing premium electric motorcycles in India. SRIVARU was founded on the realization that while the rider-motorcycle relationship is deep and complex, it is in desperate need of innovation for the next generation of riders. SRIVARU provides affordable premium E2W vehicles that provide an exceptional riding experience with redundant 3-channel automated braking, a low center of gravity to improve stability, enhanced safety features, and easy charging compatible with home charging outlets. The Company has a broad array of intellectual property, including a patent-pending chassis and drive acceleration system. In addition, SRIVARU offers customers a superior total cost of ownership, compared to traditional internal combustion engine motorcycles and E2W vehicle competitors. SRIVARU additionally oversees a manufacturing subsidiary set to play a crucial role in achieving the company’s vision for sustainable and innovative mobility. Additional information about the company is available at: http://www.srivarumotors.com/. With a focus on innovation, sustainability, and performance, SRIVARU aims to redefine the future of mobility.

Forward Looking Statements

This communication may contain a number of “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning SRIVARU’s possible or assumed future results of operations, business strategies, debt levels, competitive position, industry environment, potential growth opportunities and the effects of regulation, respectively. These forward-looking statements are based on SRIVARU’s management’s current expectations, estimates, projections and beliefs, as well as a number of assumptions concerning future events. When used in this communication, 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 SRIVARU’s management’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. These risks, uncertainties, assumptions and other important factors include, but are not limited to: (a) the outcome of any legal proceedings that may be instituted against SRIVARU or others following the announcement of the Business Combination and any definitive agreements with respect thereto, as well as the Nasdaq listing; (b) the inability to obtain financing to complete the Company’s planned expansion; (c) the inability to successfully appeal the Nasdaq’s delisting determinations; (d) the risk that current plans and operations of SRIVARU or its subsidiaries are disrupted as a result of the announcement and consummation of the Business Combination; (e) the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability of SRIVARU to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; (f) costs related to the Business Combination and ongoing operations; (g) the possibility that SRIVARU may be adversely affected by other economic, business, and/or competitive factors; (h) SRIVARU’s ability to execute its business plans and strategies, (i) SRIVARU’s estimates of expenses and profitability and (j) other risks and uncertainties indicated from time to time in SRIVARU’s public filings with the SEC, including those under “Risk Factors” therein. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made.

Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and SRIVARU assumes no obligation and, except as required by law, do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. SRIVARU gives no assurance that it will achieve its expectations. 

Company Details: 

SRIVARU Holding Limited 
2nd Floor, Regatta Office Park, West Bay Road 
P.O. Box 10655 
Grand Cayman, KY1-1006 
Cayman Islands 

Investor & Media Contact: 

Investor Relations
SRIVARU Holding Limited 
Email: ir@srivarumotors.com 
Phone: +1 (888) 227-8066 

FAQ

Why did SRIVARU Holding (SVMH) receive a delisting notification from Nasdaq on July 30, 2024?

SRIVARU received a delisting notification for failing to maintain the required minimum Market Value of Publicly Held Shares of $15,000,000 and minimum Market Value of Listed Securities of $50,000,000, as per Nasdaq Listing Rules.

What steps has SRIVARU Holding (SVMH) taken to address the Nasdaq delisting notification?

SRIVARU submitted a request for a hearing with a Nasdaq Hearing Panel on July 31, 2024, to appeal the delisting determinations and plans to present a comprehensive compliance plan at the hearing.

Will SRIVARU Holding (SVMH) continue trading on Nasdaq despite the delisting notification?

Yes, SRIVARU's securities will continue trading on Nasdaq pending the Hearing Panel's decision, as the delisting process is currently on hold due to the company's appeal request.

What are the specific Nasdaq listing requirements that SRIVARU Holding (SVMH) failed to meet?

SRIVARU failed to maintain a minimum Bid Price of $1.00, a minimum Market Value of Publicly Held Shares of $15,000,000, and a minimum Market Value of Listed Securities of $50,000,000.