Dive Brief:
- Nasdaq has started delisting proceedings against Surgalign Holdings because the digital surgery company is noncompliant with one of its requirements.
- Surgalign received notification that it no longer meets the requirement for companies on the Nasdaq Global Select Market to have a minimum of $10 million in stockholders’ equity.
- Nasdaq has given Surgalign 45 days to submit a plan to regain compliance. Surgalign aims to file a plan by the deadline.
Dive Insight:
Surgalign, the manufacturer of an augmented reality guidance system for spine surgeries, has struggled to comply with the rules for listing on Nasdaq in recent years. Late in 2021, the stock exchange sent the company a deficiency letter because its share price had fallen below $1. Surgalign regained compliance by executing a reverse stock split last year.
The action increased Surgalign’s share price above the minimum threshold for compliance. However, after a year in which its share price has fallen 82% to $1.25, the company is now noncompliant with a different Nasdaq requirement.
Nasdaq requires companies to have at least $10 million in stockholders’ equity, unless they meet the requirements for its other routes to compliance. The exchange calculates stockholder equity by subtracting all current liabilities and debt liabilities from total assets. Surgalign has fallen afoul of the rule but said it intends to submit a plan for regaining compliance by May 25.
If Nasdaq accepts the plan, it could give Surgalign as many as 180 days to regain compliance. Surgalign ended last year with $16.3 million, and while it has since sold assets and worked to cut costs, it expects its cash to fund operations into the fourth quarter.
Surgalign has reshaped its business, selling its Coflex and CoFix lines of implants to focus on digital spine surgery assets it acquired through its 2020 takeover of Holo Surgical.
