Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
As previously disclosed, on November 2, 2022, Leafly Holdings, Inc. (the
"Company") received a letter from the staff of The Nasdaq Stock Market LLC
("Nasdaq") indicating that, based upon the closing bid price of the Company's
common stock (the "Common Stock") for 30 consecutive business days, the Company
no longer met the requirement to maintain a minimum bid price of $1 per share,
as set forth in Nasdaq Listing Rule 5450(a)(1) (the "Bid Price Rule"). In
accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided 180
calendar days, or until May 1, 2023, to regain compliance with the Bid Price
Rule. To regain compliance, the closing bid price of the Company's common stock
must have been $1.00 or more per share for a minimum of 10 consecutive business
days at any time before May 1, 2023.
The Company was unable to regain compliance with the Bid Price Rule by May 1,
2023. The Company is not eligible under the applicable Nasdaq listing rules for
a second 180 calendar day compliance period. Accordingly, on May 2, 2023, the
Company received a letter from Nasdaq notifying it that the Company's Common
Stock would be subject to delisting from Nasdaq unless the Company timely
requests a hearing before a Nasdaq Hearings Panel (the "Panel"). The Panel has
the discretion to grant the Company up to an additional 180 calendar days from
May 2, 2023, to regain compliance with the Bid Price Rule. On May 8, 2023, the
Company timely requested a hearing before the Panel at which it will present its
detailed action plan to comply with the Bid Price Rule by effecting a reverse
stock split, if necessary, and request a further extension of time (the
"Request"). We understand that the Panel routinely grants additional time for a
company to cure a bid price deficiency when the compliance plan demonstrates,
like we expect our plan will, that the company will cure a bid price issue
through a reverse stock split within 180-days of a delisting notice. The Request
stayed any further action by Nasdaq, and while the hearings process is pending,
it is expected that the Common Stock will continue to be listed and traded on
Nasdaq.
As part of the Company's plan to regain compliance with the Bid Price Rule
within 180 days of May 2, 2023, the Company intends to seek stockholder approval
of an amendment to the Company's Second Amended and Restated Certificate of
Incorporation to effect a reverse stock split (the "Reverse Split Proposal") at
the upcoming Annual Meeting of stockholders. The Company expects to file
preliminary proxy materials on May 15, 2023, with respect to the Annual Meeting
of stockholders, including the approval of the Reverse Split Proposal.
The Company believes it is taking prudent steps to be successful in the Panel
hearing and with its Reverse Split Proposal and that it will ultimately be
successful in regaining compliance with the Bid Price Rule. However, there can
be no assurances that any of these efforts will be successful, and if the
Company is unable to regain compliance with the Bid Price Rule, the Common Stock
would be subject to delisting from Nasdaq.
Item 8.01 Other Events.
As previously disclosed, on October 28, 2022, the Company received a letter from
Nasdaq indicating that the Company was not in compliance with the $50 million in
minimum market value of listed securities standard for continued listing ("MMV
Issue") on The Nasdaq Global Market. In accordance with Nasdaq Listing Rules,
the Company had 180 calendar days following the date of the notification, or no
later than April 26, 2023, in which to regain compliance. To regain compliance,
the total market value of the Company's listed securities was required to have
been $50 million or more for a minimum of ten consecutive business days at any
time before April 26, 2023, which did not occur.
On April 3, 2023, the Company applied to transfer the listing of its Common
Stock and warrants from The Nasdaq Global Market to The Nasdaq Capital Market.
On April 19, 2023, the Company received a letter from Nasdaq approving the
transfer and confirming that the MMV Issue was closed, effective upon the
transfer. The Common Stock and warrants began trading on The Nasdaq Capital
Market effective with the open of trading on April 21, 2023. The Common Stock
continues to trade under the symbol "LFLY" and the Company's warrants continue
to trade under the symbol "LFLYW." The Nasdaq Capital Market operates in
substantially the same manner as The Nasdaq Global Market, with issuers listed
on The Nasdaq Capital Market tier required to meet certain financial and
corporate governance requirements to qualify for continued listing.
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