Universe Pharmaceuticals faces potential Nasdaq delisting

JI’AN, JIANGXI, CHINA - Universe Pharmaceuticals INC (NASDAQ:UPC), a Chinese pharmaceutical company currently trading at $0.15 with a market capitalization of just $0.32 million, has been notified by the Nasdaq Stock Market of its non-compliance due to a delay in filing its annual report, an issue that could lead to the delisting of the company’s securities. The Nasdaq notification, received on February 19, 2025, highlights the company’s failure to file its Annual Report on Form 20-F for the fiscal year ended September 30, 2024, which is a breach of Nasdaq Listing Rule 5250(c)(1).

The company, which specializes in the production and distribution of traditional Chinese medicine derivatives primarily for the elderly, is already before a Hearings Panel due to previous non-compliance with Nasdaq’s Listing Rule 5550(a)(2). According to InvestingPro data, the company’s financial health score is rated as WEAK, with negative EBITDA of $4.92 million and concerning cash burn rates. Universe Pharmaceuticals has until February 26, 2025, to request a stay of suspension pending the Panel’s decision. The company has announced its intention to file for this stay and is currently working on completing and submitting the overdue Form 20-F.

This recent development is part of a regulatory process that requires the company to make timely disclosures of any deficiency notifications, as mandated by Nasdaq Listing Rule 5810(b). Universe Pharmaceuticals’ products are sold across 30 provinces in China, and the company also distributes biomedical drugs, medical instruments, Traditional Chinese Medicine Pieces, and dietary supplements manufactured by third parties. The company’s stock has experienced significant challenges, with InvestingPro data showing a 99.35% decline over the past year and currently trading near its 52-week low of $0.14.

The press release from Universe Pharmaceuticals also contains forward-looking statements regarding the company’s expectations for future events and financial performance. These statements are based on current projections and involve risks and uncertainties. For deeper insights into the company’s financial health and risk metrics, including 14 additional key ProTips and comprehensive financial analysis, consider subscribing to InvestingPro. The company has clarified that it does not assume any obligation to update these forward-looking statements and has urged investors to consider all factors that may affect future results, as detailed in the company’s filings with the U.S. Securities and Exchange Commission.

This announcement is based on a press release statement from Universe Pharmaceuticals INC.

In other recent news, Universe Pharmaceuticals INC has made several significant announcements. The company has proposed a revised share consolidation ratio, shifting from the initially planned 15:1 to a range between 20:1 and 50:1, with a decision to be finalized by the board. This revision will be voted on at an extraordinary general meeting scheduled for March 1, 2025. Additionally, Universe Pharmaceuticals faces a potential delisting from the Nasdaq Capital Market due to non-compliance with the minimum bid price requirement, as its share price has been below $1 for 30 consecutive business days. The company has until February 5, 2025, to appeal this decision.

In financial developments, Universe Pharmaceuticals has secured a $15 million share sale through a registered direct offering, selling approximately 18.75 million ordinary shares at $0.80 each. This transaction, facilitated by Univest Securities, LLC, includes warrants for investors to purchase an additional 18.75 million shares. The company also announced an Extraordinary General Meeting for January 30, 2025, where shareholders will address urgent matters, although the specific agenda was not disclosed. These developments reflect Universe Pharmaceuticals’ ongoing efforts to navigate financial and regulatory challenges.

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