Calgary-based mCloud, a publicly traded company that offers cloud services for asset management, is in talks to go private as its stock price has plunged over the last year.
With tightening equity markets, low-volume trading, and other macroeconomic factors, boards like mCloud’s have increasingly explored the option of going private to navigate the downturn.
mCloud formed a special committee out of its board of directors in March to “maximize shareholder value,” in an effort to revive its share prices.
mCloud has until Sept. 19 to regain compliance with Nasdaq.
In the Nasdaq Capital Market, mCloud has been trading below the $1.00 minimum price for about three months, putting it at risk of being delisted from the stock exchange. mCloud also previously received the same notice in November 2022.
After evaluating several options, mCloud said the committee “has narrowed its efforts towards a transaction that would result in the acquisition of the company by a strategic partner.”
Founded in 2010 by Russ McMeekin (CEO) and Costantino Lanza (chief growth and revenue officer), mCloud provides a suite of asset-management solutions for the consumer goods, wind, as well as oil and gas industries. It lets companies use AI and analytics, as well as create 3D replicas of their facilities, to optimize their energy consumption.
After initially listing on the TSX Venture Exchange in 2019, mCloud began trading on the Nasdaq in 2021, where it raised $12.1 million CAD from its public offering.
mCloud’s share price has declined since then. It is currently trading at $0.47 USD on the Nasdaq. This represents a nearly 80 percent decrease compared to this time last year, following the trend of other companies that have faced headwinds in the public markets.
Similarly, Vancouver FinTech startup Mogo received the same bid price deficiency notice from Nasdaq in October and has continued to trade below the $1 minimum since then, with its shares priced at $0.81 USD by press time.
In another circumstance, Toronto-based E Inc, a vehicle auction marketplace, voluntarily delisted its shares from the Toronto Stock Exchange in April, citing “extremely limited trading volumes.”
mCloud has until Sept. 19 to regain compliance with Nasdaq, which would require its stock to close at $1.00 per share or more for at least 10 consecutive business days before the deadline. The company could qualify to extend its compliance period for 180 days by meeting Nasdaq’s other listing standards.
If it appears to Nasdaq that mCloud won’t be able to pull its shares out of deficiency, the company would be subjected to delisting.
mCloud said it will continue to pursue this potential acquisition, but did not disclose the nature or timing of any possible transaction.
Featured image courtesy mCloud.