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Yoshitsu Co., Ltd (Nasdaq: TKLF) received a notification letter from Nasdaq regarding non-compliance with the minimum bid price requirement. The company has 180 days to regain compliance by maintaining a minimum bid price of at least US$1.00 for 10 consecutive business days. Failure to do so may lead to delisting.
Positive
- Yoshitsu Co., Ltd operates in multiple countries, including Hong Kong, mainland China, Japan, North America, and the United Kingdom, providing a diverse range of products. The company’s business operations are not affected by the receipt of the Notification Letter.
Negative
- The company is currently not in compliance with the minimum bid price requirement set forth in the Nasdaq Listing Rules, which may lead to potential delisting if not resolved within the specified timeframe.
The notification from Nasdaq to Yoshitsu Co., Ltd regarding non-compliance with the minimum bid price requirement is a significant regulatory concern that could have material implications for the company’s stock liquidity and investor perception. The minimum bid price requirement is a common standard set by stock exchanges to ensure a baseline market value for listed securities and to maintain orderly market operations. Falling below this threshold often triggers a concern about the financial health and market confidence in a company.
From a financial perspective, the potential delisting from a major stock exchange like Nasdaq can lead to reduced visibility among investors, potentially lower trading volumes and increased volatility. The 180-day compliance period does provide a window for recovery, but it also introduces a timeline of uncertainty. If Yoshitsu considers a reverse share split, this could be seen as a short-term remedy to meet exchange requirements, but it does not inherently solve any underlying business challenges that may be causing the low share price. Such actions might also be viewed unfavorably by the market if perceived as purely cosmetic.
Investors will be closely monitoring Yoshitsu’s share price and any strategic moves they make to address this issue. The company’s ability to maintain its listing status without resorting to artificial measures will be crucial for its long-term credibility in the market.
Yoshitsu Co.’s diverse product portfolio, which spans from beauty and health products to electronics, positions the company in various competitive markets. The notification of non-compliance from Nasdaq may lead stakeholders to scrutinize the company’s market performance and strategic positioning. A critical factor for Yoshitsu will be its ability to leverage its product diversity to stabilize and increase its share value.
Market trends in the sectors Yoshitsu operates in, such as the beauty and health industry, are subject to consumer preferences and economic conditions. The company’s performance in these sectors, especially in its primary markets like Hong Kong, mainland China and Japan, will be essential to watch. Consumer demand in these regions, coupled with competition from other retailers and wholesalers, will influence the company’s revenue potential and, by extension, its stock price.
Understanding the competitive landscape and the company’s market share in its various segments will provide insights into its potential for recovery. The company’s response to this notification, including any strategic initiatives or operational efficiencies, will be critical in determining its future market position and the sustainability of its stock price.
The legal implications of Yoshitsu’s notification from Nasdaq involve regulatory compliance and the procedural aspects of stock exchange listings. Nasdaq’s Listing Rules are designed to maintain the integrity of the market and protect investors by ensuring that companies meet certain financial and operational criteria. The legal process following a notification of non-compliance includes a period to regain compliance and potential measures such as a reverse share split, which must be executed in accordance with securities laws and regulations.
Yoshitsu’s management will need to carefully navigate the legal requirements for any corporate actions they take to address the minimum bid price requirement. If they fail to regain compliance within the allotted time, the legal process for delisting may commence, which involves further notifications, potential appeals and ultimately, the removal of the company’s stock from the exchange. The legal team will play a crucial role in advising on compliance strategies, shareholder communications and the execution of any remedial corporate actions.
For stakeholders, understanding the legal context of these market regulations and the company’s adherence to them is vital. It provides a framework for assessing the company’s governance quality and its commitment to maintaining the standards required by market authorities.
Tokyo, Japan, Dec. 26, 2023 (GLOBE NEWSWIRE) — Yoshitsu Co., Ltd (“Yoshitsu” or the “Company”) (Nasdaq: TKLF), a retailer and wholesaler of Japanese beauty and health products, sundry products, luxury products, electronic products, as well as other products in Hong Kong, mainland China, Japan, North America, and the United Kingdom, today announced that the Company received a written notification letter (the “Notification Letter”) from the Listing Qualifications Department of the Nasdaq Stock Market LLC (“Nasdaq”) on December 20, 2023 notifying the Company that it is not in compliance with the minimum bid price requirement set forth in the Nasdaq Listing Rules for continued listing on the Nasdaq.
Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of US$1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Based on the closing bid price of the Company’s American Depositary Shares for the 30 consecutive business days from November 6, 2023 to December 19, 2023, the Company no longer meets the minimum bid price requirement.
The Notification Letter does not impact the Company’s listing on the Nasdaq Capital Market at this time. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided 180 calendar days, or until June 17, 2024, to regain compliance with Nasdaq Listing Rule 5550(a)(2). To regain compliance, the Company’s American Depositary Shares must have a closing bid price of at least US$1.00 for a minimum of 10 consecutive business days. In the event the Company does not regain compliance by June 17, 2024, the Company may be eligible for additional time to regain compliance or may face delisting.
The Company’s business operations are not affected by the receipt of the Notification Letter. The Company intends to monitor the closing bid price of its American Depositary Shares and may, if appropriate, consider implementing available options, including, but not limited to, implementing a reverse share split of its outstanding American Depositary Shares, to regain compliance with the minimum bid price requirement under the Nasdaq Listing Rules.
About Yoshitsu Co., Ltd
Headquartered in Tokyo, Japan, Yoshitsu Co., Ltd is a retailer and wholesaler of Japanese beauty and health products, sundry products, luxury products, electronic products, as well as other products in Hong Kong, mainland China, Japan, North America, and the United Kingdom. The Company offers various beauty products (including cosmetics, skincare, fragrance, and body care products), health products (including over-the-counter drugs, nutritional supplements, and medical supplies and devices), sundry products (including home goods), luxury products (including branded watches, perfume, handbags, clothes, and jewelry), electronic products (including entertainment gaming products), and other products (including food and alcoholic beverages). The Company currently sells its products through directly-operated physical stores, through online stores, and to franchise stores and wholesale customers. For more information, please visit the Company’s website at https://www.ystbek.co.jp/irlibrary/.
Forward-Looking Statements
Certain statements in this press release are forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to,” or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. In addition, there is uncertainty about the further spread of the COVID-19 virus, or the occurrence of another wave of cases, and the impact it may have on the Company’s operations, the demand for the Company’s products, global supply chains, and economic activity in general. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and in its other filings with the U.S. Securities and Exchange Commission.
For more information, please contact:
Yoshitsu Co., Ltd
Investor Relations Department
Email: ir@ystbek.co.jp
Ascent Investor Relations LLC
Tina Xiao
President
Phone: 1-646-932-7242
Email: investors@ascent-ir.com
The ticker symbol for Yoshitsu Co., Ltd is TKLF on the Nasdaq.
Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of US$1.00 per share.
Yoshitsu Co., Ltd has until June 17, 2024, to regain compliance with the minimum bid price requirement by maintaining a minimum bid price of at least US$1.00 for 10 consecutive business days.
Yoshitsu Co., Ltd may consider implementing available options, including a reverse share split of its outstanding American Depositary Shares, to regain compliance with the minimum bid price requirement under the Nasdaq Listing Rules.
