Adagio Medical (TASE:PMCN) Holdings, Inc. (NASDAQ:ADGM), a micro-cap medical instruments company with a market value of approximately $18 million, announced on Monday that it has entered into a series of waivers with its investors following a previous misstatement of financial results. The company's stock, currently trading at $1.22, has experienced a dramatic 90% decline over the past six months, according to InvestingPro data.
The waivers, effective December 26, 2024, allow the company to issue restricted shares in lieu of cash as a form of penalty payment for registration delays, with a total of 183,333 restricted shares being issued at $2.00 per share.
The company's financial misstatements were previously disclosed in a Form 8-K filed with the Securities and Exchange Commission (SEC) on November 1, 2024. The waivers pertain to agreements made on February 13, 2024, and July 31, 2024, including a Securities Purchase Agreement, a Registration Rights Agreement, and promissory notes.
InvestingPro analysis reveals concerning financial metrics, including negative EBITDA of -$30.3 million and rapidly depleting cash reserves, though the company maintains a strong current ratio of 4.42. The waivers also include an amendment to redefine the term "Warrant Shares" to include the restricted shares.
Additionally, Adagio Medical Holdings received a notice from Nasdaq on January 2, 2025, regarding non-compliance with Nasdaq's audit committee requirements. This was due to a vacancy on the audit committee following a board member's resignation, as disclosed in a Form 8-K filed on December 23, 2024.
Nasdaq has provided the company with a cure period to regain compliance, which extends until the earlier of the company’s next annual shareholders’ meeting or January 2, 2026, or June 30, 2025, if the next annual meeting is before that date.
The company is actively seeking to address the board vacancy and regain compliance with Nasdaq's continued listing requirements within the given timeframe. However, there is no guarantee that Adagio Medical Holdings will be able to meet these requirements within the cure period.
This news is based on a press release statement and reflects the latest developments regarding Adagio Medical Holdings' efforts to address its financial reporting issues and maintain its listing on the Nasdaq Stock Market.
Despite current challenges, InvestingPro Fair Value analysis suggests the stock may be undervalued at current levels. Subscribers can access 12 additional ProTips and comprehensive financial metrics to better evaluate the company's potential recovery prospects.
In other recent news, Adagio Medical Holdings faces an impending compliance issue with Nasdaq's listing rules due to a vacancy on its audit committee. This development follows the resignation of board member Shahram Moaddeb, effective January 1, 2025.
In other leadership changes, founder Olav Bergheim has stepped down as CEO and Chairperson of the Board, with Todd Usen and Orly Mishan stepping into these roles respectively.
Adagio Medical has also initiated a pivotal study for its VT Cryoablation System, aiming for FDA premarket approval, and launched its vCLAS™ catheter and ultra-low temperature cryoablation system in select European markets. The company recently completed a business combination with ARYA Sciences Acquisition Corp IV, raising approximately $84.2 million post-transaction costs.
These are among the recent developments surrounding Adagio Medical Holdings, which reported last twelve months revenue of $0.54 million, reflecting its early-stage status. The company continues to focus on the development of cryoablation technologies for the treatment of various cardiac arrhythmias.
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