Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule
or Standard; Transfer of Listing.
On April 21, 2020, ENGlobal Corporation (the "Company") received written notice
from The Nasdaq Stock Market ("Nasdaq") indicating that the Company is not in
compliance with the $1.00 minimum bid price requirement for continued listing on
Nasdaq, as set forth in Listing Rule 5550(a)(2). The notice has no immediate
effect on the listing of the Company's common stock, and its common stock will
continue to trade on The Nasdaq Stock Market under the symbol "ENG" at this
time.
Given the extraordinary market conditions, Nasdaq has determined to toll the
compliance periods for the bid price and market value of publicly held shares
requirements (collectively, the "Price-based Requirements") through June 30,
2020 (the "Tolling Period"). In that regard, on April 16, 2020, Nasdaq filed an
immediately effective rule change with the Securities and Exchange Commission.
As a result, the compliance periods for the Price-based Requirements will be
reinstated on July 1, 2020.
The Company may regain compliance with the minimum bid price requirement during
the Tolling Period or, in accordance with Listing Rule 5810(c)(3)(A), during the
180 calendar day period from July 1, 2020 to December 28, 2020. To regain
compliance, the closing bid price of the Company's common stock must meet or
exceed $1.00 per share for at least ten consecutive business days before
December 28, 2020.
If the Company is not in compliance by December 28, 2020, the Company may be
afforded a second 180 calendar day period to regain compliance. To qualify, 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. In
addition, the Company would be required to notify Nasdaq of its intent to cure
the minimum bid price deficiency, which may include implementing a reverse stock
split.
If the Company does not regain compliance within the allotted compliance
period(s), including any extensions that may be granted by Nasdaq, Nasdaq will
provide notice that the Company's common stock will be subject to delisting. The
Company would then be entitled to appeal the Nasdaq Staff's determination to a
Nasdaq Listing Qualifications Panel and request a hearing.
The Company intends to monitor the closing bid price of the Company's common
stock and consider its available options to resolve the noncompliance with the
minimum bid price requirement. No determination regarding the Company's response
has been made at this time. There can be no assurance that the Company will be
able to regain compliance with the minimum bid price requirement or will
otherwise be in compliance with other Nasdaq listing criteria.
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