Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard;
Transfer of Listing.
On January 11, 2017, we received a letter from the Listing Qualifications
staff of The Nasdaq Stock Market LLC, notifying us that we are not in compliance with Nasdaq Listing Rule 506. Pursuant to Nasdaq
Listing Rules 5605(b)(1) and 5605(c)(2)(A), respectively, we are required to have a majority of independent directors on our board
of directors and an audit committee consisting of at least three independent audit committee members, one of whom must have financial
sophistication, as evidenced by past employment experience in finance or accounting, requisite professional certification in accounting,
or any other comparable experience or background.
On January 6, 2017, Mr. Tom Jewell resigned
as a member of our board of directors and audit committee to become our Chief Financial Officer, and as of January 6, 2017, our
board of directors consists of two independent directors and two employee directors and the audit committee consists of two independent
members. Although, Mr. Long resigned as our Chief Executive Officer effective August 4, 2016 and remained Chairman of our board
of directors, he is not considered independent under the Nasdaq Listing Rules because of his recent employment with our Company.
On January 6, 2017, we notified Nasdaq
of our noncompliance with Nasdaq Listing Rules 5605(b)(1) and 5605(c)(2)(A) and expressed our intent to cure the deficiency as
soon as possible through ongoing efforts to interview potential replacements from whom we expect to appoint a suitable individual
to the board of directors to bring the Company back into compliance with the Nasdaq Listing Rules.
In accordance with Nasdaq Listing Rule
5605(b)(1)(A) and Listing Rule 5605(c)(4)(B), we will have until the earlier of our next annual shareholders’ meeting or
January 6, 2018; or if the next annual shareholders’ meeting is held before July 5, 2017, no later than July 5, 2017 to regain
compliance with the Listing Rules. We are currently interviewing potential replacements and expect to come back into compliance
prior to this deadline.
The letter has no effect on the listing
or trading of our common stock at this time. However, there can be no assurance that we will be able to regain compliance with
Listing Rules 5605(b)(1) and 5605(c)(2)(A). In the event that we do not regain compliance with the Listing Rule prior to the expiration
of the compliance period, we will receive written notification that our securities are subject to delisting, at which time we may
appeal the delisting determination to a Hearings Panel.
This report contains forward-looking statements. Forward-looking
statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions
or any other statements related to our future activities, or future events or conditions. These statements are based on current
expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements
are not guarantees of future performances and involve risks, uncertainties and assumptions that are difficult to predict. Therefore,
actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to
numerous factors, including those risks discussed in our Annual Report on Form 10-K and in other documents that we file from time
to time with the SEC. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake
any obligation to update any forward-looking statement to reflect events or circumstances after the date of this report, except
as required by law.