Item 3.01 Notice of Delisting or Failure
to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On April 3, 2023, Axcella Health Inc., (the
“Company”) received written notice from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock
Market LLC (“Nasdaq”) that (i) the Company was not in compliance with the requirement of a minimum Market Value of Publicly
Held Shares (“MVPHS”) of $15,000,000 for continued listing on the Nasdaq Global Market, as set forth in Nasdaq Listing Rule
5450(b)(2)(C); and (ii) the Company was not in compliance with the requirement of a minimum Market Value of Listed Securities (“MVLS”)
of $50,000,000, as set forth in Nasdaq Listing Rule 5450(b)(2)(A). In accordance with Nasdaq Listing Rule 5810(c)(3)(D), the Company has
a period of 180 calendar days, or until October 2, 2023, to regain compliance with the minimum MVPHS and MVLS requirements. To regain
compliance, the minimum MVPHS of the Company’s common stock is required to meet or exceed $15,000,000 for at least ten consecutive
business days during this 180-calendar day compliance period; and to regain compliance, the minimum MVLS of the Company’s common
stock is required to meet or exceed $50,000,000 for at least ten consecutive business days during this 180 calendar day compliance period.
There can be no assurance that the Company will be able to regain compliance the MVPHS or MVLS requirements or maintain compliance with
the other Nasdaq listing requirements.
In the event that the Company does not regain
compliance within the 180 calendar day compliance period, the Company may be eligible to transfer to the Nasdaq Capital Market prior to
the expiry of this period. However, if it appears to Nasdaq that the Company will not be able to cure the deficiencies, or if the Company
is not otherwise eligible, Nasdaq will provide notice to the Company that its listed securities will be subject to delisting. In the event
of such notification, the Company may appeal Nasdaq’s determination to delist its securities, but there can be no assurance Nasdaq
would grant the Company’s request for continued listing.
The MVPHS and MVLS notices are only a notification
of deficiency, not of imminent delisting, and have no immediate effect on the listing of the Company’s securities on Nasdaq. If
it appears to the Staff that the Company will not be able to cure the deficiencies, the Staff will provide written notice to the Company
that its common stock will be subject to delisting. At that time, the Company may appeal the Staff’s delisting determination to
a Nasdaq Hearing Panel (the “Panel”). The Company expects that its stock would remain listed pending the Panel’s decision.
There can be no assurance that, if the Company does appeal the Staff’s delisting determination to the Panel, such appeal would be
successful.
As previously reported on the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on January 3, 2023, the Company previously received
a letter from the Staff of Nasdaq notifying the Company that, for the 30 consecutive business day period between November 16, 2022 through
December 29, 2022, the Company’s common stock had not maintained a minimum closing bid price of $1.00 per share (the “Minimum
Bid Price Requirement”) required for continued listing on The Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(1). The
Company has until June 28, 2023 to regain compliance with the Minimum Bid Price Requirement.
Forward-Looking Statements
Certain matters discussed in this Current
Report on Form 8-K constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including
statements relating to the potential transfer to the Nasdaq Capital Market. These forward-looking statements involve many risks and uncertainties
that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation,
that the common stock will continue to trade under the symbol “AXLA”. These forward-looking statements speak only as of the
date hereof, and the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking
statement contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances
on which any such statement is based. Please refer to the publicly filed documents of the Company, including its most recent Annual Report
on Form 10-K and Quarterly Reports on Form 10-Q, for risks and uncertainties related to the Company’s business which may affect
the statements made in this Current Report on Form 8-K.