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$Kidpik (PIK.US)$ Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
As previously disclosed, on April 16, 2024, the Listing Qualifications department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notified Kidpik Corp. (the “Company”, “we” and “us”) that our stockholders’ equity as reported in our Annual Report on Form 10-K for the period ending December 30, 2023 (the “Form 10-K”), did not meet the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5550(b) requires companies listed on the Nasdaq Capital Market to maintain stockholders’ equity of at least $2,500,000 (the “Equity Rule”). In the Company’s Form 10-K, the Company reported stockholders’ equity of $1,036,834, which is below the minimum stockholders’ equity required for continued listing pursuant to Nasdaq Listing Rule 5550(b).
Nasdaq gave the Company until May 31, 2024 to submit to Nasdaq a plan to regain compliance, which plan was timely submitted. The plan discussed our expectation to regain compliance with the Equity Rule upon the closing of our previously announced March 29, 2024, Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) entered into between the Company, Nina Footwear Corp., a Delaware corporation (“Nina Footwear”), and Kidpik Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which, upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, Merger Sub will be merged with and into Nina Footwear, with Nina Footwear surviving as a wholly-owned subsidiary of Kidpik (the “Merger”). At the time of the filing of the plan of compliance, the Company also advised Nasdaq that it was the Company’s expectation to regain compliance with the Equity Rule by October 14, 2024 (180 days after the date from the original deficiency notification, which is the maximum amount of time the Staff can provide, in its discretion, for an issuer to regain compliance with the Equity Rule).
Due to unforeseen delays in completing the required Nina Footwear financial statements and pro forma information, we have unfortunately been delayed in filing the required proxy statement necessary to seek stockholder approval for the issuance of common stock in connection with the Merger, and therefore have been delayed in completing the Merger.
As a result, on October 2, 2024, the Company received a delist determination letter from the Staff advising the Company that as a result of our failure to file the proxy statement, and because Nasdaq has determined that it would not be possible for the Merger to close before October 14, 2024, the Staff has determined that the Company did not provide a definitive plan evidencing its ability to achieve compliance with the continued listing requirements and to deny the Company’s request for continued listing on The Nasdaq Capital Market.
As a result, unless the Company requests an appeal of the Staff’s determination, trading of the Company’s common stock will be suspended at the opening of business on October 11, 2024, and a Form 25-NSE will be filed with the SEC, which will remove the Company’s common stock from listing and registration on The Nasdaq Stock Market.
The Company submitted a hearing request to the Nasdaq Hearings Panel (the “Panel”), which request is expected to stay any delisting action by the Staff at least until the hearing process concludes and any extension granted by the Panel expires.
At the Panel hearing, the Company intends to present a plan to regain compliance with the minimum stockholders’ equity requirement, which is expected to be based around the closing of the planned Merger. In the interim, the Company’s common stock will continue to trade on Nasdaq under the symbol “PIK” at least pending the ultimate conclusion of the hearing process.
There can be no assurance that the Company’s plan will be accepted by the Panel or that, if it is, the Company will be able to regain compliance with the applicable Nasdaq listing requirements. If the Company’s common stock is delisted, it could be more difficult to buy or sell the Company’s common stock or to obtain accurate quotations, and the price of the Company’s common stock could suffer a material decline. Delisting could also impair the Company’s ability to raise capital and/or trigger defaults and penalties under outstanding agreements or securities of the Company.
The Company remains committed to completing the Merger and hopes to file the preliminary proxy statement in connection therewith in the upcoming week, subject to finalization of Nina Footwear’s audited and interim financial statements, and completion of the draft of the preliminary proxy statement. However, there can be no assurance that the Company will be able to timely file such proxy statement, that the Securities and Exchange Commission will not have comments or questions thereon, and/or that the Company will be able to complete the transactions necessary to regain compliance with the Rule, including the Merger.
As previously disclosed, on April 16, 2024, the Listing Qualifications department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notified Kidpik Corp. (the “Company”, “we” and “us”) that our stockholders’ equity as reported in our Annual Report on Form 10-K for the period ending December 30, 2023 (the “Form 10-K”), did not meet the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5550(b) requires companies listed on the Nasdaq Capital Market to maintain stockholders’ equity of at least $2,500,000 (the “Equity Rule”). In the Company’s Form 10-K, the Company reported stockholders’ equity of $1,036,834, which is below the minimum stockholders’ equity required for continued listing pursuant to Nasdaq Listing Rule 5550(b).
Nasdaq gave the Company until May 31, 2024 to submit to Nasdaq a plan to regain compliance, which plan was timely submitted. The plan discussed our expectation to regain compliance with the Equity Rule upon the closing of our previously announced March 29, 2024, Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) entered into between the Company, Nina Footwear Corp., a Delaware corporation (“Nina Footwear”), and Kidpik Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (“Merger Sub”), pursuant to which, upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement, Merger Sub will be merged with and into Nina Footwear, with Nina Footwear surviving as a wholly-owned subsidiary of Kidpik (the “Merger”). At the time of the filing of the plan of compliance, the Company also advised Nasdaq that it was the Company’s expectation to regain compliance with the Equity Rule by October 14, 2024 (180 days after the date from the original deficiency notification, which is the maximum amount of time the Staff can provide, in its discretion, for an issuer to regain compliance with the Equity Rule).
Due to unforeseen delays in completing the required Nina Footwear financial statements and pro forma information, we have unfortunately been delayed in filing the required proxy statement necessary to seek stockholder approval for the issuance of common stock in connection with the Merger, and therefore have been delayed in completing the Merger.
As a result, on October 2, 2024, the Company received a delist determination letter from the Staff advising the Company that as a result of our failure to file the proxy statement, and because Nasdaq has determined that it would not be possible for the Merger to close before October 14, 2024, the Staff has determined that the Company did not provide a definitive plan evidencing its ability to achieve compliance with the continued listing requirements and to deny the Company’s request for continued listing on The Nasdaq Capital Market.
As a result, unless the Company requests an appeal of the Staff’s determination, trading of the Company’s common stock will be suspended at the opening of business on October 11, 2024, and a Form 25-NSE will be filed with the SEC, which will remove the Company’s common stock from listing and registration on The Nasdaq Stock Market.
The Company submitted a hearing request to the Nasdaq Hearings Panel (the “Panel”), which request is expected to stay any delisting action by the Staff at least until the hearing process concludes and any extension granted by the Panel expires.
At the Panel hearing, the Company intends to present a plan to regain compliance with the minimum stockholders’ equity requirement, which is expected to be based around the closing of the planned Merger. In the interim, the Company’s common stock will continue to trade on Nasdaq under the symbol “PIK” at least pending the ultimate conclusion of the hearing process.
There can be no assurance that the Company’s plan will be accepted by the Panel or that, if it is, the Company will be able to regain compliance with the applicable Nasdaq listing requirements. If the Company’s common stock is delisted, it could be more difficult to buy or sell the Company’s common stock or to obtain accurate quotations, and the price of the Company’s common stock could suffer a material decline. Delisting could also impair the Company’s ability to raise capital and/or trigger defaults and penalties under outstanding agreements or securities of the Company.
The Company remains committed to completing the Merger and hopes to file the preliminary proxy statement in connection therewith in the upcoming week, subject to finalization of Nina Footwear’s audited and interim financial statements, and completion of the draft of the preliminary proxy statement. However, there can be no assurance that the Company will be able to timely file such proxy statement, that the Securities and Exchange Commission will not have comments or questions thereon, and/or that the Company will be able to complete the transactions necessary to regain compliance with the Rule, including the Merger.
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