Item 3.01. Notice of Delisting or Failure To Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On September 14, 2022, Schmitt Industries, Inc. ("we", "us," "our" or the
"Company") received written notice from the Listing Qualifications Department
(the "Staff") of The Nasdaq Stock Market LLC ("Nasdaq") notifying us that we did
not file our Annual Report on Form 10-K for the fiscal year ended May 31, 2022
(the "Form 10-K") by September 13, 2022, as required for continued listing on
the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5250(c)(1). On October
14, 2022, we received written notice from Nasdaq notifying us that, based on the
October 13, 2022 filing of Form 10-K, we were in compliance with Nasdaq Listing
Rule 5250(c)(1).
On October 14, 2022 we received a deficiency letter, from the Staff of the
Nasdaq notifying the Company that the Company's stockholders' equity as reported
in our Annual Report on Form 10-K for the period ended May 31, 2022 ("2022
10-K"), did not satisfy the continued listing requirement under Nasdaq Listing
Rule 5550(b)(1) for the Nasdaq Capital Market, which requires that a listed
company's stockholders' equity be at least $2.5 million. In its 2022 10-K, the
Company reported stockholders' equity of $605,205, and, as a result, does not
currently satisfy Nasdaq Marketplace Rule 5550(b)(1).
In accordance with Nasdaq rules, the Company has 45 calendar days from the date
of the notification to submit a plan to regain compliance with Nasdaq Listing
Rule 5550(b)(1). The Company intends to submit a compliance plan within 45 days
of the date of the notification and will evaluate available options to resolve
the deficiency and regain compliance. If the Company's compliance plan is
accepted, the Company may be granted up to 180 calendar days from October 14,
2022 to evidence compliance.
On October 14, 2022, the Company informed Nasdaq that due to the resignation of
Ms. Lillian Tung on September 30, 2022 from the Company's Board of Directors
(the "Board"), including the Audit Committee of the Board, the Company was no
longer in compliance with Nasdaq's audit committee requirements as set forth in
Nasdaq Listing Rule 5605. On October 14, 2022, Nasdaq issued a letter to the
Company confirming the Company's noncompliance with Listing Rule 5605 and
announcing that, consistent with Listing Rules 5605(b)(1)(A) and 5605(c)(4), it
would provide the Company a cure period in order to regain compliance as
follows:
The Company will have:
· until the earlier of the Company's next annual shareholders' meeting or
September 30, 2023; or
· if the next annual shareholders' meeting is held before March 29, 2023, then
the Company must evidence compliance no later than March 29, 2023.
The Board plans to conduct a search process and intends to appoint an
independent director to the Board prior to the end of the cure period.
On October 19, 2022, we received written notice from the Staff of the Nasdaq
notifying us that we did not file our Quarterly Report on Form 10-Q for the
fiscal quarter ended August 31, 2022 (the "Form 10-Q") by October 17, 2022, as
required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq
Listing Rule 5250(c)(1). Under Nasdaq rules, we now have 60 calendar days, or
until December 19, 2022, to submit to Nasdaq a plan to regain compliance with
the Nasdaq rules. If Nasdaq accepts the plan, we will have until April 17, 2023
to regain compliance. We are working towards finalizing the Form 10-Q and intend
to file the Form 10-Q in November to regain compliance.
There can be no assurance that the Company will be able to regain compliance
with Nasdaq Listing Rule 5550(b)(1), Nasdaq Listing Rule 5605, Nasdaq Listing
Rule 5250(c)(1) or maintain compliance with any other listing requirements. The
notifications have no immediate effect on the listing or trading of the
Company's common stock, which will continue to be listed and traded on the
Nasdaq Capital Market under the symbol "SMIT", subject to the Company's
compliance with the other Nasdaq listing requirements.
Item 7.01. Regulation FD Disclosure.
A press release, dated October 20, 2022, disclosing the Company's receipt of the
Nasdaq notification letter and an update on the Company, is attached hereto as
Exhibit 99.1.
The information furnished in this Item 7.01 of this Form 8-K (including Exhibit
99.1 attached hereto) shall not be deemed "filed" for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended, and shall not be incorporated
by reference into any filing of Schmitt Industries, Inc. under the Securities
Act of 1933, as amended, except as shall be expressly set forth by specific
reference in such filing.
Special Note Regarding Forward-Looking Statements
This Form 8-K contains forward-looking statements within the meaning of the
federal securities laws, that are, to different degrees, uncertain.
Forward-looking statements involve a number of assumptions, risks and
uncertainties that could cause actual results to differ materially. Important
factors that could cause actual results to differ materially from those
suggested by the forward-looking statements in this Form 8-K. In addition,
please refer to the risk factors contained in our periodic filings with the
Securities and Exchange Commission, including our Annual Report on Form 10-K for
the fiscal year ended May 31, 2022 and, available at www.sec.gov, under the
caption Risk Factors and elsewhere. We do not undertake any obligation to update
any forward-looking statements to reflect new information or events or
circumstances occurring after the date of this Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description
99.1 Press Release of Schmitt Industries, Inc., issued on October 20, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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