Troubled Impac receives stock delisting notice

Impac Mortgage Holdings received a notice from the NYSE American exchange — a marketplace for publicly traded small cap companies — that it violated its listing rules because of its continued fiscal losses.

Specifically, Impac was cited as being out of compliance since it failed to maintain required levels of shareholder equity and has lost money five years in a row.

At the end of the second quarter, Impac had stockholders’ equity of $3.5 million, according to a press release from the company. The company lost $35.1 million in 2017; $145.4 million in 2018; $7.98 million in 2019; $88.2 million in 2020; and $3.9 million in 2021. It did report a net profit in the third and fourth quarters of 2021, but slipped back into the red for the first two quarters of this year.

Over this period, trying to establish a stronger financial footing, Impac attempted to shift its model to doing primarily non-qualified mortgage loans.

However, the pandemic forced the company to temporarily suspend origination activity as investors exited the private-label securities market. Impac came back as a conforming lender, eventually working in non-QM production. But rapidly rising rates during this year again constrained Impac’s volume as the secondary market pulled back.

Impac intends to submit a plan to regain compliance to NYSE American standards by the exchange’s Sept. 26 deadline, the press release said.

It has until Feb. 26, 2024 to meet the exchange’s rules. If a plan is not submitted, rejected or if it’s accepted but Impac is unable to return to compliance — or at least make progress on the plan — Impac could be delisted.

Meanwhile, Impac will continue to trade under its current ticker symbol of IMH but have an added designation of “.BC” signifying it is out of compliance.

Impac’s 52-week low stock price of 39 cents a share was reached four times earlier in August: on the 3rd, 4th, 8th and 10th. Its high for the period was reached on Oct 10, 2021, at $1.82 per share. As of 11 AM eastern time on Aug. 30, Impac was trading at 53 cents per share.

This is not the first time Impac ran into listing problems. During the Housing Crisis, it was removed from the New York Stock Exchange and the company relisted on the American Stock Exchange, which is now NYSE American.

Separately, as it works to resolve a legacy issue from that period, Impac has filed updates with the Securities and Exchange Commission to the preliminary proxy materials for Series B and Series C preferred stock exchange offers. While no date for the meeting has been established, the date of record for eligible stockholders was revised to Sept. 9.

The exchange is designed to address a legal ruling against the company regarding its suspension of dividends on these shares back in 2008.