XTL Biopharma Faces Nasdaq Delisting, Stock Plummets

XTL Biopharmaceuticals Receives Nasdaq Delisting Notice

XTL Biopharmaceuticals Ltd (NASDAQ:XTLB) saw its American Depositary Shares (ADS) decline by 8.3% in after-hours trading Friday after receiving a formal delisting notice from the Nasdaq Stock Market. The exchange cited the company's status as a "public shell" as the primary reason for the decision.

Overview of the Situation

Nasdaq's Listing Qualifications Department issued a letter stating that XTL Biopharmaceuticals' continued listing is no longer warranted under Nasdaq Listing Rule 5101. This determination is based on the company's lack of an operating business following the insolvency and liquidation proceedings of its wholly-owned subsidiary, The Social Proxy, which was ordered by an Israeli court.

The exchange also highlighted two additional compliance failures as separate grounds for delisting: the company's failure to meet the minimum $2,500,000 stockholders' equity requirement and its non-compliance with the minimum $1 bid price rule.

Impact on the Market

The immediate market reaction to the delisting notice was negative, with XTLB's ADSs falling significantly. Nasdaq expressed concerns that the company's shell status could expose investors to market abuses, as purchasers would be unaware of the company's future operational direction. XTL has announced its intention to appeal the decision by requesting a hearing before a Nasdaq Hearings Panel.

Summary

The delisting process will be stayed pending the outcome of the appeal. However, if XTL Biopharmaceuticals fails to request a hearing by the deadline or if the appeal is unsuccessful, trading of its ADSs will be suspended from The Nasdaq Capital Market. The company's future on the exchange now depends entirely on the panel's decision.

FAQ

Q: Why is Nasdaq delisting XTL Biopharmaceuticals?
A: The primary reason is Nasdaq's determination that XTL is a "public shell" without an operating business, following its subsidiary's liquidation. Additional reasons include failing to meet minimum equity and bid price requirements.

Q: What was the immediate impact on XTLB stock?
A: The company's shares fell by 8.3% in after-hours trading immediately following the news of the delisting notice.

Q: What are the next steps for XTL Biopharmaceuticals?
A: The company plans to appeal the delisting decision. If the appeal is not successful, its ADSs will be suspended and subsequently removed from the Nasdaq exchange.

Source: Investing.com