Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing
On June 17, 2021, Baudax Bio, Inc. (the "Company") received a deficiency letter
from the Nasdaq Listing Qualifications Department (the "Staff") of the Nasdaq
Stock Market LLC ("Nasdaq") notifying the Company that, for the last 30
consecutive business days, the closing bid price for the Company's common stock
has been below the minimum $1.00 per share required for continued listing on The
Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) ("Rule
5550(a)(2)"). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company
was given 180 calendar days, or until December 14, 2021 to regain compliance
with Rule 5550(a)(2). As of December 14, 2021, the Company was not in compliance
with Rule 5550(a)(2).
To qualify for a second 180 calendar day period to regain compliance with Rule
5550(a)(2), the Company would be required to meet the continued listing
requirement for market value of publicly held shares and all other initial
listing standards for The Nasdaq Capital Market, except for the minimum bid
price requirement.
The Company is party to a Purchase and Sale Agreement, as amended (the "Alkermes
Agreement") with Alkermes plc ("Alkermes"), which obligates the Company to make
certain milestone and royalty payments to Alkermes. As contingent consideration
is an estimate of future performance and therefore is an estimate of the timing
of milestones and royalites due to the Company's licensor, periodic review and
re-estimation is appropriate and usual within quarterly periods. As of
September 30, 2021, the Company reported a liability of $66.7 million in short
and long-term contingent consideration under the Alkermes Agreement. On
November 30, 2021, and as a result of the Company's recent financial performance
and forecasting analysis, the Company determined that it was necessary to
revalue the probability-adjusted fair value of the payment obligation. Due to
the updated forecasts, the adjusted timing and probability of success of
estimated milestone and royalty payments resulted in a reduction of
approximately $37 million of the contingent consideration included on the
Company's balance sheet related to Alkermes. This includes payments that would
likely not become due and payable, and therefore such contingent consideration
was written off of the Company's balance sheet as of November 30, 2021. As a
result of such write-off, the Company showed shareholders' equity on its balance
sheet of approximately $9 million as of December 14, 2021, in compliance with
the stockholders' equity requirement of the initial listing standards for The
Nasdaq Capital Market.
The Company has provided notice of its intention to cure the Rule 5550(a)(2)
deficiency during the second compliance period (which ends June 12, 2022), by
various means, including potentially effecting a reverse stock split, if
necessary. Thus, the Company believes it qualifies for the additional 180 day
extension.
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BAUDAX BIO, INC. 
