Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR), a Maryland-based REIT, has been notified by Nasdaq of non-compliance with its minimum Publicly Held Shares requirement, triggering a potential delisting.
The company, which operates under the real estate and construction sector, disclosed on Monday that it received a notice from Nasdaq on June 28, 2024, indicating a shortfall in the required minimum of 500,000 publicly held shares.
The current report filed with the SEC states that Wheeler REIT has until July 12, 2024, to submit a plan to regain compliance. If the plan is not accepted, the company may appeal to a Nasdaq hearings panel. Despite the notice, Wheeler's common stock remains actively traded on the Nasdaq Capital Market under the ticker "WHLR," with an added non-compliance indicator for market data dissemination.
In a concurrent move, Wheeler REIT has filed a registration statement to register over 20 million shares of common stock, which will be issued upon future redemptions and conversions of its Series D Cumulative Convertible Preferred Stock. This action is anticipated to facilitate the issuance of registered common stock to settle upcoming redemptions of preferred stock.
Additionally, the company updated its Frequently Asked Questions on July 1, 2024, regarding the Series D Preferred Stock redemptions, providing guidance for holders of unregistered common stock to remove restrictions under Rule 144 of the Securities Act of 1933 if applicable conditions are met.
The SEC filing also includes forward-looking statements cautioning that actual results could materially differ due to various risks and uncertainties. Wheeler REIT's CEO and President, M. Andrew Franklin, signed off on the report, affirming the company's commitment to addressing the listing deficiency and continuing its operations. The information is based on a press release statement and reflects the company's current situation as of the date of the report.
In other recent news, Wheeler Real Estate Investment Trust has updated its reverse stock split strategy, opting for a one-for-five split over the previously planned one-for-six split. This change, detailed in a recent SEC filing, is slated to become effective at the close of business on a yet-to-be-disclosed date.
As part of the preparations, Wheeler REIT has submitted necessary amendments to its charter, including the reverse stock split and a reduction in the par value of common stock from $0.05 to $0.01 per share.
The new strategy will not impact the number of authorized shares or the company's ticker symbol. However, it will proportionally adjust the outstanding shares of common stock and the company's operating partnership units, and alter the conversion rates and prices for the company's convertible securities.
In the wake of the split, stockholders will not receive fractional shares, but will instead be compensated with a cash payment equivalent to the fractional share's value. The company also plans to adjust its 2015 and 2016 Long-Term Incentive Plans to reflect the reverse stock split.
Despite these measures, Wheeler REIT foresees potential non-compliance with Nasdaq’s Publicly Held Shares Rule due to a reduced number of publicly held shares, and is preparing to submit a plan to regain compliance. These developments are part of Wheeler REIT's ongoing efforts to meet Nasdaq's minimum bid price requirement.
InvestingPro Insights
In light of Wheeler Real Estate Investment Trust's current compliance challenges with Nasdaq, a closer look at the company's financial metrics provides a broader context. According to the latest data from InvestingPro, as of Q1 2024, Wheeler REIT has a market capitalization of approximately $9.94 million.
While the company exhibits a strong gross profit margin of 65.69% and an operating income margin of 27.58%, it faces significant challenges with profitability, as indicated by a negative P/E ratio of 0.09. Additionally, the firm's revenue has grown by 17.09% over the last twelve months, showing some positive operational momentum despite the stock's price volatility and recent poor performance.
InvestingPro Tips suggest that Wheeler's stock trades with high price volatility, which can be seen in the 57.66% return over the last month, contrasted by a 57.58% drop over the last six months and a staggering 97.9% decline over the past year. Moreover, Wheeler's liquid assets exceed its short-term obligations, which may offer some financial flexibility as the company navigates its path to compliance.
For investors seeking a deeper analysis, InvestingPro offers additional tips on Wheeler REIT, which can be found at https://www.investing.com/pro/WHLR. Potential subscribers can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking further insights that may guide investment decisions. There are 9 additional InvestingPro Tips available for Wheeler REIT, providing an extensive outlook on the company's financial health and stock performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.