Item 3.01.
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Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
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On
February 6, 2017, Power Solutions International, Inc. (the Company) (Nasdaq: PSIX) received notice from the Staff (the Staff) of the Listing Qualifications Department of The NASDAQ Stock Market LLC (Nasdaq)
indicating that the Staff had determined to delist the Companys securities from the Nasdaq Capital Market based upon the Companys continued non-compliance with Nasdaqs filing requirement, as set forth in Nasdaq Listing Rule
5250(c)(1), unless the Company timely requests a hearing before the Nasdaq Hearings Panel (the Panel). The Staffs notice followed the Companys failure to file its Quarterly Reports on Form 10-Q for the quarterly periods
ended June 30, 2016 and September 30, 2016 (the Delayed Reports) with the Securities and Exchange Commission (the SEC) prior to the expiration of the extension period on February 6, 2017, as granted by the
Staff.
The Company intends to timely request a hearing before the Panel, which request will automatically stay the suspension of trading in the
Companys common stock for at least 15 days. In connection with its request for a hearing, the Company also intends to request that the Panel determine to further stay any suspension of trading at least pending the ultimate outcome of the
hearing. The Company anticipates receipt of a determination with respect to the stay request by February 28, 2017.
As previously disclosed in its
Current Reports on Form 8-K, as filed on January 5, 2017 and February 3, 2017, the Companys consolidated financial statements for (i) the fiscal year ended December 31, 2015 and the second, third and fourth fiscal quarters
within such fiscal year, and (ii) the fiscal quarter ended March 31, 2016, will be restated to reflect the impact of certain errors involving revenue recognition, and that the Companys former independent registered public accounting
firm had resigned on January 27, 2017 citing certain concerns, including its inability to rely on management representations and material weaknesses in the Companys overall control environment. The Company has engaged a new independent
registered public accounting firm and is working diligently to quantify the expected adjustments necessary to complete the restatements and to file the Delayed Reports as soon as practicable.
As also disclosed in the Companys prior filings with the SEC, the Audit Committee of the Companys Board of Directors has been overseeing an
independent internal review of the Companys financial reporting. The Audit Committees review is being conducted with the assistance of independent counsel and forensic accounting professionals engaged directly by the Audit Committee and
is ongoing. There can be no assurance that the Company will not identify other accounting errors or additional deficiencies in internal controls as a result of the Audit Committees ongoing internal review or otherwise, or that any additional
deficiencies, if identified, will not constitute additional material weaknesses.
At the hearing, the Company will present its plan to file the Delayed
Reports and thereby evidence full compliance with Nasdaqs filing requirement. The Panel has the discretion to grant the Company an extension through August 7, 2017; however, there can be no assurance that the Panel will extend the stay of
the trading suspension beyond the automatic 15 day period or ultimately grant the Companys request for continued listing on Nasdaq.
On February 10,
2017, the Company issued a press release announcing its receipt of the Nasdaq notice. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference.
Caution Regarding Forward-Looking Statements
This Form
8-K Current Report includes information that constitutes forward-looking statements. Forward-looking statements often address our expected future business and financial performance, and often contain words such as believe,
expect, anticipate, intend, plan, or will. By their nature, forward-looking statements address matters that are subject to risks and uncertainties. Any such forward-looking statements may
involve risk and uncertainties that could cause actual results to differ materially from any future results encompassed within the forward-looking statements. Examples of such forward-looking statements include, but are not limited to, statements
regarding potential impacts of Nasdaqs notice, the ongoing nature of the Audit Committees internal review, and the ability to complete the restatement of the affected financial statements and address material weaknesses. Factors that
could cause or contribute to such differences include: the final results of the Audit Committees internal review as it impacts the Companys accounting, accounting policies and internal control over financial reporting; the reasons giving
rise to the resignation of the Companys prior independent registered public accounting firm; the time and effort required to complete the restatement of the affected financial statements and amend the related Form 10-K and Form 10-Q filings;
the inability to obtain a hearing from the Hearing Panel and
file delinquent periodic reports within the deadlines imposed by Nasdaq and the potential delisting of the Companys common stock from Nasdaq; the subsequent discovery of additional
adjustments to the Companys previously issued financial statements; the timing of completion of necessary re-audits, interim reviews and audits by the new independent registered public accounting firm; the timing of completion of steps to
address and the inability to address and remedy, material weaknesses; the identification of additional material weaknesses or significant deficiencies; risks relating to the substantial costs and diversion of personnels attention and resources
deployed to address the financial reporting and internal control matters and related class action litigation; the impact of the resignation of the Companys independent registered public accounting firm on the Company relationship with its
lender and trade creditors and the potential for defaults and exercise of creditor remedies and the implications of the same for its strategic alternatives process; the potential delisting of the Companys common stock from NASDAQ and any
adverse effects resulting therefrom; and the impact of the previously disclosed investigation initiated by the SEC and any related or additional governmental investigative or enforcement proceedings. Actual events or results may differ materially
from the Companys expectations. The Companys forward-looking statements are presented as of the date hereof. Except as required by law, the Company expressly disclaims any intention or obligation to revise or update any forward-looking
statements, whether as a result of new information, future events or otherwise.