Dermata regains Nasdaq stockholders' equity compliance but gets bid price delisting notice

Dermata Therapeutics, Inc. (Nasdaq: DRMA) reported two Nasdaq listing developments in a Form 8-K dated May 16, 2025. The company regained compliance with the Nasdaq minimum stockholders' equity requirement, and it received a separate notice that its stock is not meeting the $1.00 minimum bid price. Chief Executive Officer Gerald T. Proehl signed the filing.

Stockholders' equity regained

Nasdaq's Listing Qualifications staff wrote to Dermata on March 25, 2025 saying the company no longer met the minimum stockholders' equity requirement for continued listing on the Nasdaq Capital Market, under Listing Rule 5550(b)(1). On May 14, 2025 the staff wrote again, saying that as of that date the company had regained compliance and the matter was closed.

The filing does not say how the company regained the equity requirement, and the letter does not state the equity figure that met it.

Bid price notice and the suspension date

On May 14, 2025 the company also received a written notice that it is not in compliance with the $1.00 minimum bid price in Listing Rule 5550(a)(2). The staff added that, because the company had carried out a reverse stock split within the prior one-year period, its securities are subject to delisting from the Nasdaq Capital Market.

Under that finding, the securities will be suspended at the opening of business on May 23, 2025, unless the company requests a hearing before the Nasdaq Hearings Panel by May 21, 2025. The reverse split is the point of the notice. A company that split its shares within a year cannot count on the usual compliance period, so it faces a suspension date rather than a deadline to regain compliance.

What the company plans

Dermata says it plans to request a hearing before the Panel before May 21, 2025. The filing says the request will stay any further suspension or delisting action while the hearing runs. The company cautions that there can be no assurance its compliance plan will be accepted, or that it will regain compliance and keep the listing if it is. If the plan is not accepted, or if Nasdaq does not grant an extension and the company does not regain compliance, Nasdaq could give notice that its securities will be delisted.

The company's annual report on Form 10-K refers to a May 2024 reverse stock split. The financial statements were adjusted retroactively for it, and the par value was not changed.

The cash position

The 10-K says that as of December 31, 2024, cash and cash equivalents totaled $3.2 million. It had an accumulated deficit of $65.7 million, and it used about $11.1 million in operations during 2024. In January 2025 the company raised $2.6 million gross in a private placement of common stock, warrants and pre-funded warrants.

The 10-K says the company's existing cash is expected to fund operations into the third quarter of 2025. It also says the company expects continuing net losses, and that these factors raise substantial doubt about its ability to continue as a going concern for one year after the statements were issued.

The 8-K does not update those figures.

The business

Dermata describes itself as a late-stage medical dermatology company that identifies, develops and commercializes pharmaceutical product candidates for medical skin diseases and aesthetic applications. Its two product candidates are XYNGARI, formerly DMT310, and DMT410. Both use its Spongilla technology, derived from the freshwater sponge Spongilla lacustris.

The 10-K says XYNGARI is meant for once-weekly treatment of a variety of skin conditions, and that enrollment was completed in November 2024 in the first of two planned Phase 3 trials in moderate-to-severe acne. The 8-K reports no trial results.

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