| Item 3.01. |
Notice of Delisting or Failure to Satisfy a Continued Listing Rule
or Standard; Transfer of Listing.
|
On November 10, 2022, Ayala Pharmaceuticals, Inc. (the
“Company”) received written notice (the “Equity Notice”) from The
Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that the
Company’s stockholders’ equity as reported in its Quarterly Report
on Form 10-Q for the period
ended September 30, 2022 (the “Form 10-Q”), did not satisfy the continued
listing requirement under Nasdaq Listing Rule 5450(b)(1)(A) for the
Nasdaq Global Market, which requires that a listed company’s
stockholders’ equity be at least $10 million. As reported on
its Form 10-Q, the
Company’s stockholders’ equity as of September 30, 2022 was
approximately $8.16 million. Additionally, on
November 16, 2022, the Company received written notice (the
“Bid Price Notice” and, together with the Equity Notice, the
“Notices”) from Nasdaq notifying the Company that, for the last 30
consecutive business days, the bid price for the Company’s common
stock had closed below the $1.00 per share minimum bid price
requirement for continued inclusion on the Nasdaq Global Market
pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Bid Price
Requirement”).
The Notices have no immediate effect on the listing or trading of
the Company’s common stock on the Nasdaq Global Market and the
Company’s common stock will continue to trade under the symbol
“AYLA”.
With respect to the Equity Notice, and in accordance with Nasdaq
Listing Rules, the Company has 45 calendar days from the date of
the Equity Notice, or until December 27, 2022, to submit a
plan to regain compliance with Nasdaq Listing Rule 5450(b)(1)(A).
If the Company’s compliance plan is accepted by Nasdaq, then Nasdaq
may, in its discretion, grant the Company up to 180 calendar days
from the date of the Equity Notice, or until May 9, 2023, to
evidence compliance. If Nasdaq does not accept the Company’s plan,
then the Company will have the opportunity to appeal that decision
to a Nasdaq Hearings Panel.
With respect to the Bid Price Notice and, in accordance with Nasdaq
Listing Rule 5810(c)(3)(A), the Company has been provided a period
of 180 calendar days, or until May 15, 2023, to regain
compliance with the Bid Price Requirement. If, at any time before
May 15, 2023, the bid price for the Common Stock closes at
$1.00 or more for a minimum of 10 consecutive business days as
required under Nasdaq Listing Rule 5810(c)(3)(A) (unless the Staff
exercises its discretion to extend this ten-day period pursuant to Nasdaq
Listing Rule 5810(c)(3)(H)), the Staff will provide written
notification to the Company that it has regained compliance with
the Bid Price Requirement.
If the Company does not regain compliance with the Bid Price
Requirement by May 15, 2023, the Company may be eligible for
an additional 180 calendar day compliance period. To qualify, the
Company would need to transfer the listing of the Common Stock to
the Nasdaq Capital Market, provided that it meets the continued
listing requirement for the market value of publicly held shares
and all other initial listing standards, with the exception of the
Bid Price Requirement. To effect such a transfer, the Company would
also need to pay an application fee to Nasdaq and will need to
provide written notice to the Staff of its intention to cure the
deficiency during the additional compliance period by effecting a
reverse stock split, if necessary. As part of its review process,
the Staff will make a determination of whether it believes the
Company will be able to cure this deficiency.
The Company is currently evaluating various alternative courses of
action, including transferring to the Nasdaq Capital Market, or
submitting to Nasdaq a plan to regain compliance with the Nasdaq
Global Market listing requirements before December 27, 2022.
However, there can be no assurance that the Company will be able to
satisfy the Nasdaq Capital Market’s continued listing requirements,
regain compliance with the minimum stockholders’ equity requirement
or the Bid Price Requirement, or maintain compliance with the other
listing requirements.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
This Current Report on Form 8-K contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. All statements contained in this Current Report on Form
8-K that do not relate to
matters of historical fact should be considered forward-looking
statements, including, but not limited to, statements regarding the
Company’s intent or ability to transfer the listing of its common
stock to the Nasdaq Capital Market,