J-Long Group Limited, Ltd Receives Notification Regarding Non-Compliance with Nasdaq Global Market Minimum Market Value of Publicly Held Shares Requirement

Rhea-AI Summary

J-Long Group (Nasdaq: JL) has received a notification from Nasdaq on September 3, 2024, stating that the company is not in compliance with the minimum market value of publicly held shares (MVPHS) requirement for continued listing on the Nasdaq Global Market. The company's MVPHS has fallen below the required $5,000,000 for 30 consecutive business days. JL has been given until March 3, 2025, to regain compliance by maintaining an MVPHS of $5,000,000 or more for at least 10 consecutive business days. If compliance is not achieved, the company's shares may be subject to delisting, although JL can appeal or consider transferring to the Nasdaq Capital Market. The company's business operations remain unaffected, and it intends to explore options to regain compliance within the given timeframe.

Positive

• Company's business operations are not affected by the non-compliance notice
• JL has 180 days (until March 3, 2025) to regain compliance
• Company can appeal delisting decision or apply for transfer to Nasdaq Capital Market if compliance is not achieved

Negative

• JL is not in compliance with Nasdaq Global Market's minimum MVPHS requirement of $5,000,000
• Risk of delisting from Nasdaq Global Market if compliance is not regained by March 3, 2025
• Company's MVPHS has been below the required threshold for 30 consecutive business days

Insights

Financial Analyst

This notification from Nasdaq highlights a significant liquidity concern for J-Long Group. The company's failure to maintain the minimum $5 million market value of publicly held shares (MVPHS) suggests potential investor disinterest or market skepticism. While they have until March 3, 2025, to rectify this, it's a red flag for investors. The company's options - regaining compliance, appealing a potential delisting, or downgrading to the Nasdaq Capital Market - each carry risks. This situation could lead to reduced liquidity, making it harder for investors to trade shares. It's important to monitor J-Long's efforts to boost its MVPHS, as failure could result in delisting, potentially triggering a significant stock price decline.

Market Research Analyst

J-Long's MVPHS shortfall is a symptom of broader market dynamics. This could be due to factors like sector-wide pressures, macroeconomic headwinds, or company-specific issues. Investors should investigate whether this is an isolated incident or part of a trend affecting similar companies. The 180-day compliance window provides an opportunity to assess J-Long's strategic response. Will they initiate share buybacks, seek new investors, or implement other measures to boost market value? The company's ability to navigate this challenge will be a key indicator of management effectiveness. Moreover, this situation might present a value opportunity for risk-tolerant investors if the company can successfully address the MVPHS issue.

Legal Expert

The Nasdaq notification triggers several legal and regulatory considerations. J-Long must now navigate a complex compliance landscape, balancing disclosure requirements with strategic moves to regain MVPHS compliance. The company's statement about continuing operations is likely aimed at mitigating potential legal risks associated with market reactions. However, if J-Long fails to regain compliance, it could face shareholder litigation risks, especially if there's a perception that management didn't act decisively. The mention of a possible appeal to the Nasdaq hearings panel suggests the company is preparing for all scenarios, including potential legal challenges to maintain its listing status. Investors should closely monitor J-Long's regulatory filings for updates on compliance efforts and any material changes in business operations or strategy.

HONG KONG, Sept. 05, 2024 (GLOBE NEWSWIRE) --  J-Long Group Limited (Nasdaq: JL) (“JL” or the “Company”), today announced that the Company received a written notification (the “Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”) on September 3, 2024, notifying the Company that it is not in compliance with the minimum market value of publicly held shares ("MVPHS") requirement set forth in the Nasdaq Listing Rules for continued listing on the Nasdaq Global Market. 

Nasdaq Listing Rule 5450(b)(1)(C) requires listed securities on the Nasdaq Global Market to maintain a minimum MVPHS of US$5,000,000, and Nasdaq Listing Rule 5810(c)(3)(D) provides that the failure to meet the minimum MVPHS requirement exists if the deficiency continues for a period of 30 consecutive business days. The Notice stated that based on the Company’s MVPHS for the last 30 consecutive business days, the Company no longer meets the MVPHS requirement.

The Notice does not impact the Company's listing on the Nasdaq Global Market at this time. In accordance with Nasdaq Listing Rule 5810(c)(3)(D), the Company has been provided 180 calendar days, or until March 3, 2025, to regain compliance with Nasdaq Listing Rule 5450(b)(1)(C). To regain compliance, the Company's MVPHS needs to close at $5,000,000 or more for a minimum of 10 consecutive business days at any time during the compliance period.

If the Company does not regain compliance by March 3, 2025, Nasdaq will provide written notification to the Company that its Ordinary Shares (“SHARES”) are subject to delisting. At that time, the Company may appeal the relevant delisting determination to a hearings panel pursuant to the procedures set forth in the applicable Nasdaq Listing Rules. However, there can be no assurance that, if the Company does appeal the delisting determination by Nasdaq to the hearings panel, such an appeal would be successful. Alternatively, the Company may consider applying to transfer its securities to the Nasdaq Capital Market.

The Company's business operations have not been affected by the Notice. The Company intends to monitor its MVPHS and will consider using available options to regain compliance with the MVPHS requirement under the Nasdaq Listing Rules within the prescribed compliance period. During this time, the Company expects that the Company's SHARES will continue to be listed and traded on the Nasdaq Global Market.

About J-Long Group Limited

J-Long Group Limited is an established distributor in Hong Kong of reflective and non-reflective garment trims including, among others, heat transfers, fabrics, woven labels and tapes, sewing badges, piping, zipper pullers and drawcords. The Company offers a wide range of services to cater to customers’ needs in reflective and non-reflective garment trims, including market trend analysis, product design and development and production and quality control. For more information, visit the Company’s website at http://j-long.com.

Safe Harbor Statement

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC, which are available for review at www.sec.gov.

Hong Kong:

J-Long Group Limited

Edwin Chun Yin Wong, CEO and Director ir@j-long.com +852 3693 2110

 

Source: J-Long Group Limited

FAQ

What is the minimum MVPHS requirement for J-Long Group (JL) to maintain Nasdaq Global Market listing?

J-Long Group (JL) must maintain a minimum market value of publicly held shares (MVPHS) of $5,000,000 to comply with Nasdaq Global Market listing requirements.

How long does J-Long Group (JL) have to regain compliance with Nasdaq's MVPHS requirement?

J-Long Group (JL) has 180 calendar days, until March 3, 2025, to regain compliance with Nasdaq's minimum MVPHS requirement.

What options does J-Long Group (JL) have if it fails to regain compliance by March 3, 2025?

If J-Long Group (JL) fails to regain compliance by March 3, 2025, it can appeal the delisting determination to a hearings panel or consider applying to transfer its securities to the Nasdaq Capital Market.

How can J-Long Group (JL) regain compliance with Nasdaq's MVPHS requirement?

J-Long Group (JL) can regain compliance if its MVPHS closes at $5,000,000 or more for a minimum of 10 consecutive business days at any time during the compliance period.