noco-noco delays reverse stock split to meet Nasdaq rules

SINGAPORE - noco-noco Inc. (NASDAQ:NCNC), a technology solutions provider, announced it is seeking an extension for its planned reverse stock split following a delay that has prevented the action from occurring by the initial November 1, 2024 deadline. The delay stems from the company's failure to submit the necessary Company Event Notification Form to Nasdaq five business days prior to the planned effective date.

The reverse stock split was approved by shareholders at an Extraordinary General Meeting held on October 17, 2024, along with the adoption of an Amended Memorandum & Articles of Association. However, due to the timing of required regulatory filings and the issuance of consideration shares to noco-tech, a wholly-owned subsidiary of 3DOM Alliance Inc., the process has been postponed. The transfer agent needed additional time to process updates to the shareholder register.

As a result, the company will need to obtain shareholder ratification for a revised effective date of the share consolidation during an upcoming EGM, scheduled for December 13, 2024, with the reverse stock split expected to take place approximately a week later on December 20, 2024.

This move is part of noco-noco's broader strategy to comply with Nasdaq's minimum bid price requirement and the $2.5 million minimum stockholders' equity requirement. The company recently closed the acquisition of separator production facilities from noco-tech Inc. for approximately $9 million, issuing 90,433,183 restricted ordinary shares at $0.10 per share. This transaction has significantly improved the company's shareholder equity position from a deficit of $7.3 million to a positive $1.7 million.

noco-noco is focused on accelerating the transition to a decarbonized economy through its X-SEPA™ battery separator technology. The company aims to address the need for clean, affordable, and sustainable energy storage solutions.

The information provided is based on a press release statement from noco-noco Inc. and reflects the company's current intentions regarding its compliance efforts and future plans.

In other recent news, noco-noco Inc. has made significant strides in its growth strategy. The company recently acquired manufacturing equipment that incorporates X-SEPA™ technology from 3DOM Alliance and noco-tech, expected to increase battery lifespans by up to five times. This acquisition involves a $9 million transfer of X-SEPA™ separator manufacturing equipment, which will enable noco-noco to produce separators that deliver up to 35MWh.

In financial developments, noco-noco secured a $150 million standby equity line of credit (ELOC) with Arena Business Solutions, which is expected to enhance its financial flexibility and support the commercialization of its X-SEPA™ technology. The company also announced a comprehensive restart plan to advance its X-SEPA™ battery technology, with the goal of mass-producing high-performance batteries by 2027 in partnership with 3DOM Alliance Inc and noco-tech Co., Ltd.

These recent developments are part of noco-noco's ongoing efforts to advance sustainable energy storage solutions. The company is expanding its operations into grid-scale and commercial energy storage solutions, with plans to secure a 1 GWh project in Japan and collaboration with Singapore-based B2G Energies Pte Ltd on renewable energy projects across the Asia Pacific.

InvestingPro Insights

As noco-noco Inc. (NASDAQ:NCNC) navigates its compliance challenges with Nasdaq, recent financial data from InvestingPro sheds light on the company's current position. The stock's price-to-book ratio stands at -1.68, reflecting the negative shareholder equity situation that the company is attempting to address through its recent acquisition and planned reverse stock split.

InvestingPro data reveals that NCNC's operating income for the last twelve months as of Q2 2024 was -$23.96 million, mirroring its EBIT and EBITDA figures. This negative profitability aligns with an InvestingPro Tip indicating that the company "suffers from weak gross profit margins." The challenging financial landscape is further underscored by the substantial year-to-date price total return of -44.95% and a one-year price total return of -75.55%.

Despite these headwinds, an InvestingPro Tip notes that the "stock generally trades with low price volatility," which could provide some stability as the company works towards meeting Nasdaq's requirements. Investors seeking a more comprehensive analysis can access additional InvestingPro Tips, with 13 more tips available for NCNC on the InvestingPro platform.

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