Happy City Holdings Limited (NASDAQ:HCHL) shares slid on Wednesday after the company disclosed it received a Nasdaq notice about its stockholders' equity falling below minimum requirements.
Happy City Holdings reports that the Nasdaq Listing Qualifications staff informed it on Jan. 23 that it did not meet the $2.5 million stockholders' equity threshold required for continued listing on the Nasdaq Capital Market.
Nasdaq Compliance Issue
Happy City said its latest audited financials showed total equity below the required level, and it did not satisfy alternate listing tests for market value or net income.
The firm said its Class A shares continue to trade on the Nasdaq Capital Market under symbol "HCHL" and that current operations are unaffected by the notice.
Under listing rules, Happy City has 45 days, until March 9, 2026, to file a plan with Nasdaq showing how it will restore compliance, and Nasdaq could grant up to 180 additional days to meet requirements.
Company Strategy
Happy City said it is exploring different steps to return to compliance, including options within normal corporate planning and capital strategies.
The company cautioned that there is no guarantee Nasdaq will approve its compliance plan or that the company will meet the equity standard and other continued listing obligations.
Based in Hong Kong, Happy City operates three all-you-can-eat hotpot restaurants serving mixed-style, Shabu Shabu-style and Thai-style specialty hotpot.
HCHL Price Action: Happy City Holdings shares were down 16.15% at $1.35 at the time of publication on Wednesday, according to Benzinga Pro data.
Photo: Shutterstock
