Gauzy Faces Nasdaq Delisting Despite Stock Split and Debt Restructuring

Less than two weeks after implementing a 1-for-20 reverse stock split, Israeli tech firm Gauzy has received a delisting notice from the Nasdaq stock exchange. The company announced on September 15th that it intends to appeal the decision to Nasdaq's hearing committee, which will temporarily halt the delisting process and allow the stock to continue trading. The notice was issued because Gauzy failed to meet Nasdaq's minimum share price requirement.

Nasdaq had previously warned Gauzy in March that its stock had closed below $1 for 30 consecutive trading days, giving the company 180 days, until September 14th, to rectify the violation. To comply, the stock needed to close at $1 or higher for ten consecutive business days. Gauzy did not meet this condition.

The reverse stock split, which took effect on September 11th, consolidated 20 shares into one, reducing the number of outstanding shares from approximately 22.9 million to 1.14 million and artificially increasing the per-share price. Gauzy explicitly stated that a goal of this move was to regain compliance with Nasdaq's minimum price requirement. However, the split was enacted only three days before the compliance deadline, making it impossible to achieve ten consecutive trading days above $1 before the deadline.

Despite the current share price appearing to be around $6.40, this figure is misleading due to the reverse split. The company also received a separate notice in May for failing to file its annual report (Form 20-F) for 2025. Although Gauzy submitted a plan to regain compliance with reporting requirements, Nasdaq informed the company that it was no longer eligible for professional review of its plan due to the failure to meet the share price requirement, making the late filing an additional reason for potential delisting.

This delisting warning comes shortly after a positive development: on September 8th, the Tel Aviv District Court approved Gauzy's debt settlement. The agreement addresses approximately $61 million in past liabilities, with a group of investors led by management committing to inject about $7 million in new capital. The settlement, supported by 98.96% of creditors who voted, aims to resolve Gauzy's financial issues, but it does not directly address the Nasdaq compliance problems regarding share price and regular financial reporting. Gauzy must submit its appeal request by September 22nd.