Waldencast Requests Hearing With Nasdaq Amidst Delisting Endangerment

Waldencast, a combined company featuring leading beauty brands Milk Makeup and Obagi Skincare, earlier this month revealed it is in danger of being delisted from the Nasdaq. 

 

The company began trading on the Nasdaq under the ticker symbol “WALD” on July 28, 2022.

 

Waldencast said it received a written notice from Nasdaq on October 31, 2023 denoting it was subject to delisting for failure to file its annual report with the US Securities and Exchange Commission (SEC). 

 

Waldencast reportedly has not released its quarterly earnings since a year ago; a correction was issued about two weeks later at the time to address a discrepancy in the net loss which was changed from a redacted $16.8 million to $14 million, per the company. During said quarter, Obagi recorded net sales of $60.4 million, a 3.2% increase compared with the prior-year quarter. The company reported Milk Makeup’s net sales were a $18.5 million, up 41.7%. 

 

While Waldencast was due to report fourth-quarter earnings in addition to an annual report on March 15, there was a delay in filing due to an ongoing review of its year-end 2022 financial statements and related issues with Obagi. The review coincided with concerns regarding the lapse in renewing importation licenses in Vietnam. The company reportedly said in a separate filing on April 25 that it continued to await a payment related to its acquisition of a 60% stake in its Southeast Asia distributor. 

 

Waldencast in a Nov. 6 press release said it plans to request a hearing before the Nasdaq Hearings Panel pursuant to the procedures set forth in the Nasdaq Listing Rules. 

 

“As previously disclosed, Waldencast has continued to review the historical accounting used by Obagi with respect to the matters described in previous announcements furnished with the SEC,” read a September press release on the company’s official website. “In connection with such review, Waldencast proactively self-reported the review to the SEC. Waldencast is fully cooperating with the SEC and continues to respond to requests in connection with this matter.”
 

Also in the release, the company said it assumes its belief in Obagi as “well-positioned” to expand and grow in the SEA region, which it called a “strategic priority” for the company given the region’s “strong consumer demand” for skincare and beauty products. In connection with a recent restructuring which entailed five key appointments to its management team, the company said it plans to relaunch the Obagi brand in Vietnam under a new “go-to-market structure” having resumed sales to customers online ahead of the brand relaunch due in the fourth quarter of 2023. 

 

In the coming years, Waldencast said it intends to roll out the brand throughout the south APAC region, which it said represents a potential business opportunity that is roughly “10 times the size of the Vietnam market.”

 

As for Milk Makeup, the brand released several new products this year, which included contouring Sculpt Sticks, Pore Eclipse primer and Odyssey Lip Oil.

 

“Waldencast remains confident that Milk Makeup is well-positioned to deliver on its strategy and realize the significant opportunities available in its segment,” said the release.

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