CARA Therapeutics Inc.

01/17/2025 | Press release | Distributed by Public on 01/17/2025 15:45

Material Event (Form 425)

Item 8.01 Other Events.

Regained Compliance - Nasdaq Minimum Bid Price Requirement

As previously disclosed, on February 1, 2024, Cara Therapeutics, Inc. (the "Company") received a notification letter from the Listing Qualifications Department (the "Staff") of The Nasdaq Stock Market ("Nasdaq") with respect to the Company's failure to maintain a minimum closing bid price of $1.00 per share on any business day over a thirty consecutive business day period, as required for continued listing on the Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(1) ( "Rule 5450(a)(1)"). As previously disclosed, the Company had been provided an initial period of 180 calendar days, or until July 30, 2024, to regain compliance with Rule 5450(a)(1), which period was extended by Nasdaq by notification received on July 31, 2024 for an additional 180 calendar day period ending January 27, 2025 to regain compliance with the same minimum closing bid price requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) (together with Rule 5450(a)(1), the "Minimum Bid Price Requirement"). Effective as of August 1, 2024, the listing of the Company's common stock was transferred from the Nasdaq Global Market to the Nasdaq Capital Market.

As part of the Company's plans to regain compliance with the Minimum Bid Price Requirement following the initial notification letter, a series of alternate amendments to effect (i) a reverse stock split and (ii) a reduction in the total number of authorized shares of the Company's common stock was approved by the Company's stockholders at the Company's 2024 Annual Meeting of Stockholders held on June 4, 2024.

On December 19, 2024, the Company's board of directors approved a one-for-twelve (12) reverse stock split (the "Reverse Stock Split") and corresponding reduction in the total number of authorized shares. On December 30, 2024, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split, and the Company's common stock began trading on the Nasdaq Capital Market on a post-split basis as of December 31, 2024.

On January 16, 2025, the Company received a letter from the Staff notifying the Company that it has regained compliance with the Minimum Bid Price Requirement. The closing bid price of the Company's common stock was at or above $1.00 per share for ten consecutive business days, and Nasdaq considers the matter closed.

Remaining Open Nasdaq Matter - Compliance Period Extension Granted for Stockholders' Equity Requirement

In addition to its previous noncompliance with the Minimum Bid Price Requirement, and as previously disclosed, on November 19, 2024, the Company received a letter (the "Stockholders' Equity Notice") from the Staff notifying the Company that it was not in compliance with the minimum stockholders' equity requirement for continued listing on the Nasdaq Capital Market as set forth in Nasdaq Listing Rule 5550(b)(1) (the "Stockholders' Equity Requirement"), because the Company's stockholders' equity of $707,000, as reported in the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, was below the required minimum of $2.5 million and the Company did not meet either of the alternative compliance standards.

As requested by the Staff, the Company subsequently submitted a plan to regain compliance to Nasdaq (the "Compliance Plan"). Based on the Compliance Plan, which contemplates the closing of the proposed merger (the "Merger") between the Company and Tvardi Therapeutics, Inc. ("Tvardi"), on January 14, 2025, Nasdaq granted the Company an extension until May 19, 2025 to regain compliance with the Stockholders' Equity Requirement.

The Merger will constitute a "change of control" for purposes of Nasdaq's listing rules and will require that the combined company comply with all applicable criteria for initial listing on the Nasdaq Capital Market, including a higher minimum bid price requirement and higher minimum stockholders' equity requirement. The parties intend to satisfy each of the applicable listing criteria upon completion of the proposed Merger such that the combined company will remain listed on the Nasdaq Capital Market.