Enthusiast Gaming has publicly announced its intention to voluntarily delist its common shares from the Nasdaq Stock Market, while reaffirming its commitment to the Toronto Stock Exchange (TSX).
The Canadian digital media company has already notified Nasdaq of its decision, which has been made due to the “relatively high insurance, listing, reporting, legal and compliance costs that are associated with a continued US stock exchange listing”.
Enthusiast Gaming estimates that it incurs over US$2m (C$2.75m) of annual costs in connection with maintaining a dual listing, which expenses are expected to increase significantly in future years due to increasing compliance and other regulatory requirements.
Enthusiast Gaming also cited the administrative burdens and requirements associated with maintaining a dual listing.
The Los Angeles-based firm previously announced in a press release dated May 4 that the Listing Qualifications department of
Nasdaq had approved its request for a 180-day extension to regain compliance with Nasdaq’s minimum bid price requirement under Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Rule”).
Enthusiast Gaming was given until October 30 to regain compliance with the Bid Price Rule but the firm confirmed yesterday, October 23, that after “careful consideration”, it had evaluated the benefits and costs of continuing its listing on Nasdaq, and had come to the conclusion that “it is appropriate to voluntarily delist from Nasdaq”.
The company also concluded that a reverse split of its shares in order to come into compliance with the Bid Price Rule was “not in the best interest of shareholders”.
Enthusiast Gaming’s announcement added: “The Company intends to file a Form 25 with the US Securities and Exchange Commission on or about October 30, 2023, which Form would become effective 10 days following filing thereof, resulting in the delisting of the Shares from Nasdaq on or about November 9, 2023.”