Periodic Filing, Bid Price, Stockholders’ Equity, and Annual Meeting — Chronic Noncompliance

Rule 5250(c)(1): A Company shall timely file all required periodic financial reports with the Commission. Rule 5550(a)(2): Minimum bid price of at least $1 per share. Rule 5550(b)(1): Stockholders’ equity of at least $2.5 million. Rule 5620(a): Each Company listing common stock shall hold an annual shareholders’ meeting no later than one year after the end of its fiscal year-end.

Issue:  At issue is whether the Listing Council should affirm the Panel’s decision to delist a company that chronically violated multiple listing rules across more than two and a half years, missed two consecutive periodic filing deadlines while subject to a Mandatory Panel Monitor, and argued that business transformation and internal control improvements justified a further exception.

Determination:  On May 26, 2026, the Listing Council affirmed the Panel’s decision to delist the Company.

The Company experienced a pattern of sustained noncompliance with multiple listing requirements beginning in January 2024, including successive violations of the Stockholders’ Equity Rule, Periodic Filing Rule, Bid Price Rule, and Annual Meeting Rule. Following a hearing, the Panel imposed a Mandatory Panel Monitor in November 2025, under which any further noncompliance would trigger immediate delisting without additional cure time. The Company effected a 1-for-20 reverse stock split in December 2025, restoring bid price compliance, but within weeks fell back into violation of the Periodic Filing Rule for two consecutive reporting periods. On appeal, the Company argued it was largely compliant at the time of the delisting decision and reported stockholders’ equity over $54 million; that new management had achieved a 433% revenue increase and a 45.5% net loss reduction; and that it had improved internal controls and shortened filing delays. The Company also argued the Panel failed to seek clarification before delisting and that auditor changes were driven by operational necessity rather than misconduct.

Nasdaq Staff argued the Company’s pattern of chronic noncompliance across multiple rules, covering more than two and a half years with delinquent periodic filings for over 19 months and no filings at all for nearly one year, amply supported the delisting. Staff noted the last-minute Form 10-Q filed the day before the trading suspension took effect was incomplete, lacking the required Management Discussion and Analysis section. Staff also characterized the Company’s three successive auditor changes as a red flag and noted the stock had already fallen below $1 less than two months after the December 2025 reverse split. Staff argued that the Company’s equity improvement was driven by a dilutive Bitcoin-for-stock transaction rather than operational profitability.

The Listing Council affirmed the Panel’s decision. The Mandatory Panel Monitor had expressly warned the Company that any further noncompliance would result in immediate delisting, yet the Company proceeded to miss two consecutive periodic filing deadlines. The Company’s chronic pattern of noncompliance across multiple rules was undisputed, and even the last-minute periodic filing it submitted was incomplete. Business transformation arguments did not overcome the Company’s sustained inability to meet multiple concurrent listing requirements.

Minimum Bid Price — Excessive Split Rule — Listing Council Call for Review

Rule 5550(a)(2): A Company must maintain a minimum bid price of at least $1 per share for continued listing. Rule 5810(c)(3)(A)(iv) (Excessive Split Rule): If a Company’s security fails to meet the continued listing requirement for minimum bid price and the Company has effected a reverse stock split over the prior one-year period, or has effected one or more reverse stock splits over the prior two-year period with a cumulative ratio of 250 shares or more to one, then the Company shall not be eligible for any compliance period and the Staff shall issue a delisting determination. Rule 5101: Nasdaq has broad discretionary authority to delist securities where continued listing is inadvisable or unwarranted in the public interest.

Issue:  At issue is whether the Listing Council should grant the Company an exception when it is noncompliant with multiple listing requirements by significant margins, including for its fifth Bid Price Rule violation in three years. This matter came before the Listing Council on a call for review by Listing Council members, not on appeal by the Company; the Listing Council stayed the trading suspension pending its review.

Determination:  On October 1, 2025, the Listing Council affirmed the decision of the Panel to delist the Company’s securities under the clear error standard.

The Company raised numerous arguments asserting the Hearings Panel acted in error, but failed to address the reality that at the time the Panel issued its decision, the Company was in violation of the Bid Price Rule for the fifth time in three years. Setting aside questions about whether the Excessive Split Rule was an appropriate basis for delisting, the Council noted the Panel had ample authority to act based solely on the Company’s latest Bid Price Rule violation. The only practical effect of the Excessive Split Rule was to disqualify the Company from an automatic 180-day cure period, such that any exception the Company sought became subject to Panel discretion. The Panel was under no obligation to grant additional time and, given the Company’s prior history of repeat noncompliance, it exercised that discretion reasonably. Even if the Excessive Split Rule were inapplicable, the Panel could still have delisted the Company’s securities pursuant to Rule 5101, which affords Nasdaq broad discretionary authority to deny continued listing even where denial is stricter than the Listing Rules otherwise prescribe.

The public interest concern with companies that engage in repeated cycles of Bid Price Rule violations and reverse stock splits that do not result in sustained compliance was the very reason Nasdaq proposed the Excessive Split Rule, stating that recidivism is often indicative of serious ongoing problems unlikely to be solved through further exceptions. The Council found it irrelevant that the Company executed an unsanctioned reverse split ahead of its self-imposed deadline and that its subsequent bid price traded above $1 for more than two weeks. The call for review was not a de facto extension period — the time to act was before the hearing.

If the Listing Council were to credit post-hearing compliance efforts, it would render the Hearings Panel process meaningless, as a company could disregard Staff and Panel deadlines so long as it ultimately regained compliance before the Council issued its decision. The question before the Council was whether the Panel acted in clear error based on the facts presented at the time of the hearing; post-hearing compliance was irrelevant to that inquiry. The Council found no clear error and affirmed the delisting.

Bid Price, Stockholders’ Equity, and Public Interest — Highly Dilutive Financing

Rule 5550(a)(2): A Company must maintain a minimum bid price of at least $1 per share for continued listing. Rule 5550(b)(1): A Company must maintain minimum stockholders’ equity of at least $2.5 million for continued listing on the Capital Market. Rule IM-5101-1: Nasdaq has broad discretionary authority to delist securities to maintain quality and public confidence in its market, prevent fraudulent and manipulative acts, and protect investors and the public interest.

Issue:  At issue is whether the Listing Council should affirm the Panel’s decision to delist the Company’s securities on grounds that its plans for curing the Bid Price Rule deficiency lacked credibility, its plans for addressing the Minimum Equity Rule violation were speculative, and its highly dilutive offering raised public interest concerns.

Determination:  On August 26, 2025, the Listing Council affirmed the Panel did not err in its decision to delist the Company’s securities.

The Company was in violation of multiple listing requirements, including the Bid Price Rule, the Minimum Equity Rule, and the Public Interest Rule. The Company had been in violation of the Bid Price Rule for more than a year despite receiving two grace periods, and did nothing within the time allotted to rectify its deficiency. Instead, the Company proceeded with a highly dilutive Listing of Additional Shares transaction, ballooning outstanding shares from approximately 21 million to over one billion — a roughly 5,000% increase — making it more difficult to cure its Bid Price deficiency and remain in compliance going forward. The Company conducted a reverse stock split on April 30, 2025, but did not do so with the intent of fully regaining compliance, and did not in fact do so, with shares trading at $0.14 per share thereafter. The Company challenged the Panel’s reasoning, highlighted alleged inconsistencies in Nasdaq’s treatment of similar offerings, and argued that it had received guidance from Nasdaq’s Office of General Counsel supporting the transaction.

Staff disputed that the Hearings Panel erred. Staff noted that at the time of the hearing, the Company had been out of compliance with the Bid Price Rule for over a year, had amassed a stockholders’ equity deficit of $7.5 million, and had conducted a highly dilutive securities offering — any one of which constituted adequate grounds to delist, while the confluence of all three demanded it. Staff dismissed the OGC guidance argument as informal and non-binding, noting that the Listing Rules themselves warned that a highly dilutive transaction might give rise to public interest concerns. Staff rejected the selective enforcement argument, noting the facts and circumstances of each delisting are unique, and disputed the Company’s contention that Nasdaq abdicated its responsibilities by not pre-reviewing listing of additional shares transactions.

The Listing Council determined to affirm the decision to delist based on violations of both the Bid Price Rule and the Minimum Equity Rule. The Council concluded the Panel was reasonable in finding the Company’s bid price compliance plan lacked credibility and its equity compliance plan was speculative and unlikely to be sustainable. OGC guidance was informal and non-binding, the selective enforcement argument was without merit because each delisting turns on unique facts, and the Company’s challenge to Nasdaq’s LAS review process was unfounded.

Minimum Bid Price — Disputed Compliance History and Compliance Plan

Rule 5450(a)(1): Requires companies listed on the Nasdaq Global Market to maintain a minimum bid price of at least $1 per share.

Issue:  At issue is whether the Listing Council should grant the Company an exception where it is noncompliant with Nasdaq Listing Rule 5450(a)(1), and whether the Panel made material factual errors in assessing the Company’s compliance history and the cause of its bid price decline.

Determination:  On July 10, 2025, the Listing Council affirmed the Panel’s decision to delist the Company.

After reviewing the full record, the Council concluded that the Panel acted within its discretion and that no material factual errors justified overturning the delisting determination. The Council agreed the Company lacked a clear, credible, and sustainable plan to regain and maintain compliance with the Minimum Bid Price Rule. Although the Panel miscalculated the length of time the Company would have been out of compliance had it been permitted to cure the deficiency by its proposed deadline, the Council found this error was not material and did not form the basis of the Panel’s decision. The Council also supported the Panel’s finding that the Company had not demonstrated with certainty that a particular equity financing arrangement caused the decline in its stock price, noting the Company provided no quantifiable evidence isolating that arrangement’s effect from other possible factors.

The Council found that the Company’s proposed remediation plans — reliance on a reverse stock split, anticipated market reactions, or speculative operational milestones — were insufficient and lacked the specificity and certainty required to justify continued listing. Even if a reverse split were implemented, Staff noted the Company could face additional listing deficiencies, highlighting broader concerns about the Company’s ability to maintain long-term compliance with all applicable Nasdaq listing requirements.

The Listing Council sustained the Panel’s decision to delist the Company’s securities. The Panel acted within its discretion, no material factual errors were identified that warranted reversal, and the Company’s proposed remediation plans were too speculative and insufficiently specific to justify granting a further exception. On July 31, 2025, the Nasdaq Board of Directors declined to call for review of the Council’s decision, representing Nasdaq’s final action in this matter.

Minimum Bid Price — Repeat Noncompliance

Listing Rule 5550(a)(2): Requires companies listed on the Nasdaq Capital Market to maintain a minimum bid price of at least $1 per share. Rule 5815(c): The Hearings Panel may subject a company to additional or more stringent criteria or delist when circumstances make continued listing inadvisable or unwarranted, even where the issuer technically meets the enumerated listing requirements.

Issue:  At issue is whether the Listing Council should grant the Company an exception where it is noncompliant with Nasdaq Listing Rule 5550(a)(2), and whether the Panel had authority to delist the Company notwithstanding 28 consecutive trading days of compliance at the time of the Panel’s decision.

Determination:  On May 15, 2025, the Listing Council affirmed the Panel’s decision to delist the Company.

Although the Company had regained compliance with the Minimum Bid Price Rule and had sustained it for 28 consecutive trading days at the time of the Panel’s decision, the Council concluded that short-term compliance did not outweigh the Company’s long history of repeated bid price deficiencies and its inability to maintain compliance for any meaningful duration over multiple years. The Council rejected the Company’s argument that the Panel improperly applied Nasdaq Listing Rule 5810(c)(3)(H) by considering factors beyond the four criteria listed in that rule. The Council agreed with Staff that Rule 5810(c)(3)(H) constrains only Staff’s discretion — not the Panel’s — and that even for Staff, the rule expressly allows consideration of all relevant facts and circumstances. For the Panel, broader discretion derives from Listing Rule 5815(c), which authorizes delisting when circumstances make continued listing inadvisable or unwarranted.

In upholding the delisting, the Council emphasized the Company’s persistent pattern of falling out of compliance since its initial listing and its reliance on repeated reverse splits or ADS ratio changes to regain bid price compliance. The Council found that these temporary measures did not demonstrate an ability to sustain compliance, and that the Company’s business uncertainties and repeated rapid declines in share value reasonably supported the Panel’s skepticism. The Company’s argument that the Panel’s decision was unprecedented or contrary to historical practice was also rejected.

The Council determined that the Panel acted within its authority and reasonably concluded that continued listing of the Company’s securities was not appropriate. On July 31, 2025, the Nasdaq Board of Directors declined to call for review of the Council’s decision, representing Nasdaq’s final action in this matter.

Minimum Bid Price and Market Value of Listed Securities

Rule 5550(a)(2): The Bid Price Rule requires companies listed on the Nasdaq Capital Market to maintain a minimum bid price of at least $1 per share. Rule 5550(b)(2): The Company must maintain a Market Value of Listed Securities of at least $35 million, or net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the three most recently completed fiscal years.

Issue:  At issue is whether the Listing Council should grant the Company an exception where it is noncompliant with the Minimum Bid Price Rule and the Market Value of Listed Securities Rule.

Determination:  On March 20, 2025, the Listing Council affirmed the Panel’s decision to delist the Company.

Out of compliance with both the Minimum Bid Price Rule and the Market Value of Listed Securities Rule, the Company received multiple extensions from the Panel conditioned on completing a reverse stock split and regaining compliance by specified deadlines. Despite repeated extensions, the Company consistently missed its own projected milestones, citing delays arising from the regulatory requirements of its jurisdiction of incorporation and the time required to obtain shareholder approval. The Panel delisted the Company in November 2024. The Company appealed, arguing for reinstatement to allow it to complete a 50:1 reverse stock split and attributing its delays to regulatory hurdles, while also highlighting ongoing management changes and strategic initiatives as evidence of progress toward compliance.

Staff opposed reinstatement, arguing the Company had demonstrated a pattern of setting and missing its own milestones, had secured only a small fraction of its claimed financing target, and that the proposed reverse stock split remained speculative given the Company’s significant net equity deficit and high burn rate. Staff emphasized that the Company’s prolonged noncompliance, repeated missed deadlines, and reliance on speculative future transactions rather than concrete financial improvements provided no reasonable basis to expect sustained compliance going forward.

The Listing Council affirmed the Panel’s decision, finding it not clearly erroneous. The Company had repeatedly promised to effect a reverse split and failed to deliver, regardless of the reasons attributed to the delay. Its pattern of setting and missing self-imposed deadlines, combined with an insufficient equity and financing position, supported the conclusion that long-term compliance with Nasdaq’s listing requirements could not reasonably be expected.

Minimum Bid Price, Low Priced Stocks, and Annual Meeting

Rule 5550(a)(2): The Bid Price Rule requires companies listed on the Nasdaq Capital Market to maintain a minimum bid price of at least $1 per share. Rule 5810(c)(3)(A)(iii): If a company’s security has a closing bid price of $0.10 or less for ten consecutive trading days, the Staff shall issue a delisting determination with no available compliance period. Listing Rule 5620(a): Requires Nasdaq-listed companies with common or voting preferred stock to hold an annual meeting of shareholders within one year of their fiscal year-end.

Issue:  At issue is whether the Listing Council should grant the Company an exception where it is noncompliant with several listing rules, including after repeatedly missing commitments to effect a reverse stock split within stated timelines.

Determination:  On July 17, 2025, the Listing Council affirmed the Panel’s decision to delist the Company.

Nasdaq initiated multiple compliance actions against the Company beginning in April 2024 for repeated violations of its listing requirements, including failures to timely file periodic reports, maintain minimum bid price and market value, and hold an annual shareholder meeting. After its stock closed at $0.10 or less for ten consecutive trading days, the Company faced immediate delisting exposure under the Low Priced Stocks Rule. Despite several extensions and commitments — including executing a reverse stock split and filing delinquent reports — the Company consistently missed deadlines and failed to provide timely updates to the Hearings Panel. The Panel determined the Company lacked a viable compliance plan and adequate organizational resources, and delisted the Company’s securities on April 22, 2025. The Company appealed, arguing it had filed all delinquent reports, held its annual meeting, obtained shareholder approval for a reverse split, and had a plan to restore stockholders’ equity and pivot its business toward renewable-powered data centers and cryptocurrency.

Nasdaq Staff argued the Company had committed numerous listing violations since April 2024 and had repeatedly failed to effect its promised reverse stock split within any of its stated timelines. Staff noted that as of its opposition brief the Company’s stock was trading at less than one penny, and that the Company’s most recent quarterly report disclosed a stockholders’ deficit of $92 million and substantial going concern doubt. Staff characterized the proposed compliance plan — including speculative liability settlements, equity raises, and a business model pivot — as lacking the definitiveness required to justify a further exception.

The Listing Council affirmed the Panel’s decision. The Company’s pattern of repeated noncompliance with numerous listing rules, combined with missed deadlines and failure to keep the Panel apprised of its progress, supported the delisting decision. The Listing Council lacked confidence in the Company’s compliance plans and was not persuaded the Company was positioned to avoid further recidivism even if the plans succeeded.

Minimum Bid Price — Repeat Noncompliance

Rule 5550(a)(2): Requires companies listed on the Nasdaq Capital Market to maintain a minimum bid price of at least $1 per share. Rule 5815(c)(4): The Hearings Panel may subject a company to additional or more stringent criteria for continued listing based on any event, condition, or circumstance that makes continued listing inadvisable or unwarranted in its opinion, even though the securities meet all enumerated criteria for listing.

Issue:  At issue is whether the Listing Council should grant the Company an exception where it is noncompliant with the Minimum Bid Price Rule, including whether the Panel had authority to delist the Company notwithstanding its having regained compliance shortly before the Panel’s determination.

Determination:  On May 15, 2025, the Listing Council affirmed the Panel’s decision to delist the Company.

Despite the Company having regained compliance with the Minimum Bid Price Rule shortly before the Panel’s determination, the Council found that the Listing Rules grant the Panel broad discretion to delist a company when it concludes that continued listing is inadvisable — even if the issuer meets all numerical listing criteria at the time of review. The Council emphasized that Listing Rule 5815(c)(4) specifically authorizes the Panel to impose more stringent criteria based on events or circumstances suggesting that continued listing may not be warranted. A key factor was the Company’s extensive history of repeated bid price deficiencies resulting in multiple delisting proceedings in less than two years. Although the Company regained compliance after its latest reverse stock split, this brief period of compliance did not outweigh the Company’s pattern of persistent, recurring failures. The Council also noted troubling conduct by the Company’s representative, who submitted an altered and misleading email regarding a late filing — an action that caused the Council to strike the Company’s reply brief from the record.

The Council rejected the Company’s argument that the Panel had misapplied Listing Rule 5810(c)(3)(H). That provision limits only Staff’s discretion when determining how long a company must trade above $1.00 before a deficiency is cured; it does not apply to the Hearings Panel. Moreover, even for Staff, the rule permits consideration of all relevant facts and circumstances, not solely the four factors the Company cited. The Council found that the Panel appropriately relied on the Company’s compliance history under the broader authority provided in Listing Rule 5815(c).

The Council concluded that the Panel acted reasonably in determining that continued listing of the Company’s securities was inadvisable, given the Company’s recurring bid price problems and uncertainty surrounding its business prospects. On July 31, 2025, the Nasdaq Board of Directors declined to call for review of the Council’s decision, representing Nasdaq’s final action in this matter.

Stockholders’ Equity — Undocumented Asset Transaction

Rule 5550(b)(1): A Company that has its Primary Equity Security listed on the Capital Market must continue to meet all of the requirements set forth in Rule 5550(a) and at least one of the Standards set forth in Rule 5550(b). The relevant standard is the Equity Standard, which requires stockholders’ equity of at least $2.5 million.

Issue:  At issue is whether the Listing Council should grant an exception where the Company’s claimed equity compliance is based on an undocumented asset acquisition and the Company has a history of missing projected milestones.

Determination:  Affirm the decision of the Panel to delist the Company.

Following bid price and periodic filing deficiencies, Staff issued an additional delisting determination for noncompliance with the Stockholders’ Equity Rule. On appeal, the Company requested a short extension and pointed to an asset purchase of commercial real property valued at approximately $7.2 million, two planned acquisitions, and intended executive hires to improve internal controls. The Company represented it would file its delinquent annual report within weeks but did not submit a reply brief.

Staff argued the Company provided no documentation to substantiate the asset purchase — no agreement, appraisal, or valuation — insufficient detail about the planned acquisitions, and had failed to file its delinquent annual report by the date it had promised. Staff noted the Company had produced different plans with different timeframes within a period of less than three weeks.

The Listing Council affirmed the Panel’s decision, finding the Company’s submissions insufficient to substantiate the claimed transactions. The Company declined to submit a reply brief, forgoing the opportunity to address Staff’s concerns. The Company had a history of missing projected milestones, and granting an exception would have been contrary to Nasdaq’s obligation to protect investors and market integrity.

Market Value and Total Holders — SPAC Business Combination

Rule 5450(b)(2)(A): A Company listed on the Nasdaq Global Market must maintain a Market Value of Listed Securities of at least $50 million. Rule 5450(a)(2): A Company listed on the Nasdaq Global Market must maintain a minimum of 400 Total Holders.

Issue:  At issue is whether the Listing Council should grant an exception where a SPAC’s sole compliance plan — a pending business combination — has not been completed within the Panel’s full discretionary period and the requisite SEC registration statement has not been declared effective.

Determination:  Affirm the decision of the Panel to delist the Company.

The Company, a SPAC on the Nasdaq Global Market, fell out of compliance with market value and total holder requirements while pursuing a business combination. The Panel granted an exception representing the full extent of its discretion, conditioned on demonstrating compliance with initial listing standards, but the business combination was not completed. On appeal, the Company argued the Form S-4 Registration Statement was nearing SEC effectiveness, unresolved comments had decreased significantly, the transaction carried no minimum cash condition, and Nasdaq had not raised concerns in its review of the change of control application.

Staff argued the business combination was no closer to completion than when the exception was first granted, the SEC had not declared the registration statement effective with no clear timeline, further shareholder votes were required, and the Company had consistently missed its own projected milestones. Staff cited investor protection concerns and Listing Council precedent supporting the delisting of companies that rely on uncertain mergers to regain compliance.

The Listing Council affirmed the Panel’s decision, finding the compliance plan not adequately definitive. The business combination could not proceed until the SEC declared the registration statement effective — an event that had not occurred and whose timing was uncertain. The Company had consistently missed projected milestones, and granting a further exception would have been contrary to Nasdaq’s obligation to protect investors and market integrity.

Bid Price and Stockholders’ Equity — Repeat Noncompliance

Rule 5550(a)(2): A company’s primary equity security must maintain a minimum bid price of at least $1 per share. Rule 5550(b)(1): The Equity Standard requires stockholders’ equity of at least $2.5 million. Rule 5815(d)(4)(A): A Hearings Panel may monitor a Company’s continued compliance for up to one year after the Company regains compliance if the Panel concludes there is a likelihood that the Company will fail to maintain compliance during that period.

Issue:  At issue is whether the Listing Council should affirm a Panel delisting decision where a company subject to a Panel Monitor fell out of bid price compliance within weeks of completing a reverse stock split, and its compliance plan is dependent on speculative regulatory and market events.

Determination:  Affirm the decision of the Panel to delist the Company.

The Company had experienced multiple periods of noncompliance since first falling out of compliance with the Exchange’s continued listing standards. Following a prior panel’s imposition of a Panel Monitor, the Company fell back out of bid price compliance within 17 trading days of completing a reverse stock split — its third compliance failure in approximately 14 months. The Panel delisted as required by the Panel Monitor. On appeal, the Company highlighted its clinical pipeline, an anticipated regulatory drug application and priority review designation, prospective licensing revenue, and equity financing arrangements, arguing anticipated positive developments would restore its bid price and stockholders’ equity.

Staff argued that long-term compliance was dependent on factors outside the Company’s control — including drug approval and favorable market reactions — that the compliance plan was nearly identical to a prior failed plan, and that the Company had demonstrated an inability to maintain bid price compliance even briefly following a reverse stock split. Staff contended the compliance plan was insufficiently definitive given the Company’s history of noncompliance.

The Listing Council affirmed the Panel’s decision. The Company’s compliance history — including multiple periods of noncompliance and a reverse stock split that maintained bid price compliance for only 17 trading days — supported the Panel’s determination. Long-term compliance remained dependent on speculative factors outside the Company’s control, and certain anticipated developments described by the Company appeared to have passed without the projected positive market impact.