Schmitt Industries Announces Intention to Delist and Deregister Its Common Stock
February 04 2020 - 8:30AM
Schmitt Industries, Inc. (NASDAQ: SMIT) (the “Company” or
“Schmitt”) today announced its intention to delist its common stock
from the NASDAQ Stock Market (“NASDAQ”) and list on the OTC Pink
Market. Shifting the listing allows Schmitt to save costs and focus
resources on expanding its business units. Management and the board
of directors are committed to maintaining transparency and
accountability and, following the delisting, the Company will
continue to file audited financials, disclose material news and
report insider transactions. SMIT’s current shareholders will
remain shareholders of the Company.
The Company has notified the NASDAQ of its intent to voluntarily
delist its common stock from the NASDAQ. The Company currently
anticipates that it will file with the Securities and Exchange
Commission (the “SEC”) a Form 25 relating to the delisting of its
common units on or about February 14, 2020 and anticipates that the
delisting of its common stock is expected to be effective ten days
thereafter. The purpose of the Form 25 filing is to affect the
voluntary delisting from the NASDAQ of the Company’s outstanding
common stock and the deregistration of the common stock under
Section 12(b) of the Securities Exchange Act of 1934, as amended.
After the effectiveness of the Form 25 filing, the Company also
intends to file a Form 15 with the SEC, requesting the suspension
of the Company’s reporting obligations under Sections 13(a) and
15(d) of the Exchange Act and the deregistration of its common
stock under Section 12(g) of the Exchange Act. The Company expects
its common stock to begin trading on the OTC Market’s Pink market
under the Company’s current trading symbol “SMIT.” The Company does
not expect the delisting to have any adverse effects on its
business operations.
“Our Company incurs substantial costs associated with SEC
registration and listing on the NASDAQ that are disproportionate to
the size and nature of our businesses. After evaluating alternative
markets, we concluded that moving to the OTC Pink market will allow
our team to better focus its resources and capital while remaining
committed to transparency and reporting. We will continue to
reassess our listing position and retain the option of uplisting in
the future,” commented Michael R. Zapata, Chairman and CEO.
The delisting of the common stock from the NASDAQ could impair
the liquidity and market price of the common stock. Additionally,
the delisting of the common stock from a national exchange could
materially adversely affect the Company’s access to capital
markets, and any limitation on market liquidity or reduction in the
price of the common stock as a result of that delisting could
adversely affect the Company’s ability to raise capital on terms
acceptable to the Company, or at all. If the Company files Forms 15
and 25 and is successful in deregistering its common stock prior to
the due date for its next periodic report, then the Company will no
longer be required to file annual, periodic and current reports
with the SEC.
This deregistration is considered a “Qualifying Event” for the
purposes of certain restricted stock unit (“RSU”) awards to
directors, executives and employees. For the purposes of this
transaction, all individuals have waived the Qualifying Event
provision, and this action will not trigger any RSU vesting.
Share Repurchases
On January 31, 2020, the Company entered into an agreement with
former director David Hudson to initiate a cashless exercise for
64,166 of his options, whereby the Company will purchase 36,000
shares for $3.25 per share from Mr. Hudson to fund the exercise of
his remaining 28,166 shares. This transaction is outside of the
recently announced $2 million share repurchase plan (the “Plan”).
To date, no shares have been repurchased under the Plan, which
remains active.
About Schmitt Industries
Schmitt Industries, Inc., founded in 1987, designs, manufactures
and sells high precision test and measurement products, solutions
and services through its Acuity® and Xact® product lines. Acuity
provides laser and white light sensor distance measurement and
dimensional sizing products, and our Xact line provides
ultrasonic-based remote tank monitoring products and related
monitoring revenues for markets in the Internet of Things
environment.
Contact:Schmitt Industries, Inc.Michael R.
ZapataChief Executive Officer (503) 227-7908
Schmitt Industries (NASDAQ:SMIT)
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