|
|
Item 3.01.
|
Notice of Delisting or Failure to Satisfy a Continued
Listing Rule or Standard; Transfer of Listing.
|
Corporate Governance Deficiency Letter
On February 18, 2019, EnSync, Inc. (the “Company”)
received a deficiency letter from the NYSE American LLC (the “Exchange”) informing the Company that it is not in compliance
with the Exchange’s continued listing standards as set forth in Sections 801(h), 804 and 805 of the Exchange’s Company
Guide (the “Company Guide”). Specifically, given the fact that the Company’s four independent directors resigned
on February 11, 2019, the Exchange has determined the Company does not meet the requirements of Section 801(h) as it does not have
(i) a board of directors consisting of at least 50% independent directors or (ii) an audit committee comprised of at least two
independent members. Furthermore, Rule 10A-3 of the Securities and Exchange Act of 1934, as amended, requires an audit committee
consisting of one independent member. Additionally, the Company does not have sufficient independent directors to fulfill the requirements
with respect to board nominations and executive compensation required by Sections 804 and 805 of the Company Guide. The Company’s
continued listing on the Exchange is predicated on (i) appointing one independent director to the Company’s board of directors
and audit committee no later than March 18, 2019 and (ii) regaining compliance with all other corporate governance requirements
of Part 8 of the Company Guide no later than April 18, 2019.
In the interim, the Company’s common stock will continue
to be listed on the Exchange, subject to the Company’s compliance with other continued listing requirements, and will continue
to trade under the symbol “ESNC,” with the added designation of “.BC” to indicate that the Company is below
compliance with the Exchange’s listing standards. The Exchange also publishes a list of noncompliant issuers and displays
the .BC indicator on its website.
Filing Delinquency Notification
On February 20, 2019, the Company received a separate deficiency
letter from the Exchange informing the Company that it is not in compliance with the Exchange’s continued listing standards
as the Company failed to timely file its Quarterly Report on Form 10-Q for the period ended December 31, 2018 (the “Delinquent
Report”), which was due to be filed with the Securities and Exchange Commission (“SEC”) no later than February
14, 2019 (collectively the “Filing Delinquency”).
As a result of the foregoing, the Company has become subject
to the procedures and requirements of Section 1007 of the Company Guide. During the six-month period from the date of the Filing
Delinquency (the “Initial Cure Period”), the Exchange will monitor the Company and the status of the Delinquent Report
and any subsequent reports until the Filing Delinquency is cured. If the Company fails to cure the Filing Delinquency within the
Initial Cure Period, the Exchange may, in its sole discretion, allow the Company’s securities to be traded for up to an additional
six-month period (the “Additional Cure Period”), depending on the Company’s specific circumstances. If the Exchange
determines that an Additional Cure Period is not appropriate, suspension and delisting procedures will commence in accordance with
the procedures set forth in Section 1010 of the Company Guide.
Notwithstanding the foregoing, however, the Exchange may in
its sole discretion decide (i) not to afford the Company any Initial Cure Period or Additional Cure Period, as the case may be,
at all or (ii) at any time during the Initial Cure Period or Additional Cure Period, to truncate the Initial Cure Period or Additional
Cure Period, as the case may be. Furthermore, the Exchange may immediately commence suspension and delisting procedures if the
Company is subject to delisting pursuant to any other provision of the Company Guide, including if the Exchange believes, in its
sole discretion, that continued listing and trading of the Company’s securities on the Exchange is inadvisable or unwarranted
in accordance with Sections 1001-1006 of the Company Guide.
In the interim, the Company’s common stock will continue
to be listed on the Exchange, subject to the Company’s compliance with other continued listing requirements, and will continue
to trade under the symbol “ESNC.” The Exchange will make a late filer (“.LF”) indicator available on the
consolidated tape. Each data vendor that disseminates the quotes and trades of Exchange-listed issuers may append this indicator
to the ticker symbol of the Company. Each vendor is free to use an indicator of its own choosing so the letter or symbol used to
indicate this status may differ from vendor to vendor. The Exchange also publishes a list of noncompliant issuers and displays
the .LF indicator on its website.