UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
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| Item 3.01 | Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing |
On June 17, 2021, Baudax Bio, Inc. (the “Company”) received a deficiency letter from the Nasdaq Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, for the last 30 consecutive business days, the closing bid price for the Company’s common stock has been below the minimum $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (“Rule 5550(a)(2)”). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was given 180 calendar days, or until December 14, 2021 to regain compliance with Rule 5550(a)(2). As of December 14, 2021, the Company was not in compliance with Rule 5550(a)(2).
To qualify for a second 180 calendar day period to regain compliance with Rule 5550(a)(2), the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, except for the minimum bid price requirement.
The Company is party to a Purchase and Sale Agreement, as amended (the “Alkermes Agreement”) with Alkermes plc (“Alkermes”), which obligates the Company to make certain milestone and royalty payments to Alkermes. As contingent consideration is an estimate of future performance and therefore is an estimate of the timing of milestones and royalites due to the Company’s licensor, periodic review and re-estimation is appropriate and usual within quarterly periods. As of September 30, 2021, the Company reported a liability of $66.7 million in short and long-term contingent consideration under the Alkermes Agreement. On November 30, 2021, and as a result of the Company’s recent financial performance and forecasting analysis, the Company determined that it was necessary to revalue the probability-adjusted fair value of the payment obligation. Due to the updated forecasts, the adjusted timing and probability of success of estimated milestone and royalty payments resulted in a reduction of approximately $37 million of the contingent consideration included on the Company’s balance sheet related to Alkermes. This includes payments that would likely not become due and payable, and therefore such contingent consideration was written off of the Company’s balance sheet as of November 30, 2021. As a result of such write-off, the Company showed shareholders’ equity on its balance sheet of approximately $9 million as of December 14, 2021, in compliance with the stockholders’ equity requirement of the initial listing standards for The Nasdaq Capital Market.
The Company has provided notice of its intention to cure the Rule 5550(a)(2) deficiency during the second compliance period (which ends June 12, 2022), by various means, including potentially effecting a reverse stock split, if necessary. Thus, the Company believes it qualifies for the additional 180 day extension.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Baudax Bio, Inc. | ||
| By: | /s/ Gerri A. Henwood | |
| Name: | Gerri A. Henwood | |
| Title: | Chief Executive Officer | |
Date: December 16, 2021