UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard.
As previously reported, on May 26, 2022, Yunhong CTI Ltd. (“CTI”, the “Company” or “we”), received a written deficiency notice (the “May 2022 Notice”) from The Nasdaq Capital Market (“Nasdaq”) stating that the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”) because the Company’s common stock had failed to maintain a minimum closing bid price of $1.00 over the prior 30 consecutive business days. In accordance with Nasdaq Listing Rule 5810(c)(3)(A) (the “Compliance Period Rule”), the Company was provided a period of 180 calendar days, or until November 22, 2022 (the “Compliance Date”), to regain compliance with the Minimum Bid Price Rule. Since that date, the Company actively monitored the closing bid price of its common stock and evaluated available options to regain compliance with the Minimum Bid Price Rule.
On November 23, 2022, the Company received a staff determination letter from Nasdaq stating that the Company had not regained compliance with the Minimum Bid Price Rule by the Compliance Date, and that, because the Company does not comply with the $5,000,000 stockholders equity initial listing requirement for The Nasdaq Capital Market, it is not eligible for a second 180 day compliance period (the “Noncompliance Notice”). The Noncompliance Notice also stated that, unless the Company requests a timely appeal of this determination, the Company’s securities will be scheduled for delisting and will suspended at the opening of business on December 2, 2022.
The Company’s board of directors has reviewed this matter, and has directed management to file an appeal of Nasdaq’s determination with the Nasdaq Hearings Panel, and to explore alternatives for regaining compliance with the Minimum Bid Price Rule, which may include seeking to effect a reverse stock split with respect to the Company’s common stock. However, there can be no assurance that the Company will be successful in its appeal and or its related efforts to regain compliance.
This summary is not intended to include all terms of the Noncompliance Notice, which is filed as Exhibit 99.1 to this Current Report on Form 8-K and are incorporated by reference into this Item 3.01.
Item 8.01 is incorporated herein by reference.
Item 8.01 Other Events.
Our common stock could be delisted from Nasdaq, which would seriously harm the liquidity of our common stock. Nasdaq requires listing issuers to comply with certain standards in order to remain listed on its exchange. If, for any reason, Nasdaq should delist our common stock from trading on its exchange and we are unable to obtain listing on another reputable national securities exchange, a reduction in some or all of the following may occur, each of which could materially adversely affect our stockholders:
● the liquidity and marketability of our common stock;
● the market price of our common stock;
● our ability to obtain financing for the continuation of our operations;
● the number of institutional and general investors that will consider investing in our common stock;
● the number of market makers in our common stock;
● the availability of information concerning the trading prices and volume of our common stock; and
● the number of broker-dealers willing to execute trades in shares of our common stock.
In addition, if we fail to regain compliance to be eligible to trade on Nasdaq, we may have to pursue trading on a less recognized or accepted market, such as the over the counter markets, our stock may be traded as a “penny stock” which would make transactions in our stock more difficult and cumbersome, and we may be unable to access capital on favorable terms or at all, as companies trading on alternative markets may be viewed as less attractive investments with higher associated risks, such that existing or prospective institutional investors may be less interested in, or prohibited from, investing in our common stock. This may also cause the market price of our Class A common stock to further decline.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements. Statements made in this report that are not historical facts are “forward-looking” statements (within the meaning of Section 21E of the Securities Exchange Act of 1934) that involve risks and uncertainties and are subject to change at any time. These “forward-looking” statements may include, but are not limited to, statements containing words such as “may,” “should,” “could,” “would,” “expect,” “plan,” “goal,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or similar expressions. We have based these forward-looking statements on our current expectations and projections about future results. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from statements made herein. More information on factors that could affect our business and financial results are included in our public filings made with the Securities and Exchange Commission, including our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.
Item 9.01 – Financial Statements and Exhibits
| Exhibit No. | Exhibit | ||
99.1 |
Determination Letter from Nasdaq, dated November 23, 2022. | ||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: | November 30, 2022 | YUNHONG CTI LTD. | |
| By: | /s/ Frank Cesario | ||
| Name: | Frank Cesario | ||
| Title: | Chief Executive Officer | ||