Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On April 1, 2016,
Clean Diesel Technologies, Inc. (the Company) received written notice (the Notification Letter) from The Nasdaq Stock Market (NASDAQ) indicating that the Company is not in compliance with
the minimum stockholders equity requirements set forth in NASDAQ Listing Rule 5550(b)(1), which is one of the alternative tests for continued listing on The NASDAQ Capital Market. In the Companys Form 10-K for the period ended December 31, 2015, the Company reported stockholders equity of $437,000. In addition, the Notification Letter indicates that as of March 31, 2016, the Company did not meet the other alternative tests of market value of listed securities or net income from continued operations under Listing Rule 5550(b) and therefore, no longer complies with the continued listing rule. NASDAQ Listing Rule 5550(b)(1) requires the issuing company of listed securities to maintain a minimum stockholders equity of $2,500,000 (the Minimum Stockholders Equity Standard).
The Notification Letter states that the Company has 45 calendar days from the date of the Notification Letter, or until May 16, 2016, to submit a plan that would bring it into compliance with the continued listing standards identified above. If such a plan were submitted, and if NASDAQ were to approve that plan, the Company may have up to 180 calendar days from the date of the Notification Letter to regain compliance with applicable listing standards.
The Company is currently considering available options to resolve its failure to comply with the Minimum Stockholders Equity Standard and to regain compliance with NASDAQs listing standards. However, there can be no assurance that the Company will submit a plan to NASDAQ to regain compliance, or that any plan, if submitted by the Company, will be accepted by NASDAQ thereby permitting the continued trading of the Companys common stock on The NASDAQ Capital Market. If the Company fails to regain compliance with the Minimum Stockholders Equity Standard, its common stock will be subject to delisting by NASDAQ. In the event of delisting, the Company anticipates that its common stock would trade on the OTC markets.
As previously disclosed, the Company was previously notified that it no longer satisfied NASDAQs $1.00 per share minimum bid price requirement for continued listing, as set forth in NASDAQ Listing Rule 5550(a)(2) (the Minimum Bid Price Standard). Accordingly, to regain compliance and qualify for continued listing on NASDAQ, the minimum bid price per share of the Companys common stock must be at least $1.00 for at least ten consecutive business days prior to August 10, 2016. Regardless of any outcome in connection with the Minimum Stockholders Equity Standard, if the Company fails to regain compliance with the Minimum Bid Price Standard, its common stock will continue to be subject to delisting by NASDAQ.
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