SigmaTron International, Inc. Receives Nasdaq Notice Regarding Late Form 10-K Filing

Rhea-AI Summary

SigmaTron International (SGMA) has received a delinquency notification from Nasdaq due to the late filing of its Form 10-K for the fiscal year ended April 30, 2024. The company attributes the delay to ongoing negotiations with lenders regarding credit agreement amendments. While this non-compliance with Nasdaq Listing Rule 5250(c)(1) doesn't immediately affect SGMA's listing, the company must submit a compliance plan by October 15, 2024. If accepted, Nasdaq may grant an extension until February 12, 2025 for SGMA to regain compliance. The company is currently working on completing the Form 10-K.

Positive

• No immediate effect on SGMA's Nasdaq Capital Market listing
• Potential extension until February 12, 2025 to regain compliance if plan is accepted

Negative

• Late filing of Form 10-K for fiscal year ended April 30, 2024
• Non-compliance with Nasdaq Listing Rule 5250(c)(1)
• Ongoing negotiations with lenders regarding credit agreement amendments
• Risk of delisting if compliance plan is not accepted or executed

Insights

Financial Analyst

SigmaTron's delayed 10-K filing raises significant concerns about the company's financial health and operational stability. The ongoing negotiations with lenders J.P. Morgan Chase and TCW Asset Management suggest potential liquidity issues or covenant breaches. This situation could lead to stricter lending terms or reduced credit availability, impacting SigmaTron's financial flexibility. The delay in financial reporting also increases uncertainty for investors and may erode market confidence. While Nasdaq's grace period provides some breathing room, failure to file within the extended deadline could result in delisting, severely affecting the stock's liquidity and value. Investors should closely monitor the company's progress in submitting its compliance plan and eventual 10-K filing for a clearer picture of SigmaTron's financial position.

Legal Expert

The Nasdaq notice puts SigmaTron in a precarious legal position. The company now faces a tight deadline to submit a credible compliance plan by October 15, 2024. Failure to do so, or to meet the extended February 2025 deadline if granted, could result in delisting proceedings. This situation exposes SigmaTron to potential shareholder litigation risks, especially if the delay is found to stem from material issues or mismanagement. The company must tread carefully in its public disclosures to avoid any statements that could be construed as misleading. Additionally, the ongoing lender negotiations hint at possible covenant violations or the need for debt restructuring, which could trigger further legal and financial complications. SigmaTron's management must prioritize transparency and swift resolution to mitigate these legal risks.

ELK GROVE VILLAGE, Ill., Aug. 21, 2024 (GLOBE NEWSWIRE) -- SigmaTron International, Inc. (the “Company”) announced today that on August 16, 2024, it received a delinquency notification letter from the Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company is not in compliance with the continued listing requirements under Nasdaq Listing Rule 5250(c)(1) because the Company did not timely file its Form 10-K for the fiscal year ended April 30, 2024 (the “Form 10-K”). The notification letter has no immediate effect on the listing or trading of the Company’s common stock on the Nasdaq Capital Market.

The Company filed a Notification of Late Filing on Form 12b-25 on July 30, 2024, indicating that the filing of the Form 10-K would be delayed because the Company requires additional time to complete its year-end close procedures in light of ongoing negotiations with the Company’s lenders with respect to amendments to the credit agreements with J.P. Morgan Chase Bank, N.A. and TCW Asset Management Company, as Administrative Agent. These processes require significant resources from the Company’s financial, accounting and administrative personnel and, as a result, the Company requires additional time to complete its quarterly review, including the preparation and finalization of its Form 10-K.

Nasdaq has informed the Company that the Company must submit a plan of compliance (the “Plan”) within 60 calendar days, or no later than October 15, 2024, addressing how it intends to regain compliance with Nasdaq’s listing rules and, if Nasdaq accepts the Plan, it may grant an extension of up to 180 calendar days from the Form 10-K original filing due date, or until February 12, 2025, to regain compliance.

The Company is working on completing the Form 10-K.

About SigmaTron International, Inc.

Headquartered in Elk Grove Village, Illinois, SigmaTron International, Inc. operates in one reportable segment as an independent provider of electronic manufacturing services (“EMS”). The EMS segment includes printed circuit board assemblies, electro-mechanical subassemblies and completely assembled (box-build) electronic products. The Company and its wholly-owned subsidiaries operate manufacturing facilities in Elk Grove Village, Illinois; Acuna, Chihuahua, and Tijuana Mexico; Union City, California; Suzhou, China; and Biên Hòa City, Vietnam. In addition, the Company maintains an International Procurement Office and Compliance and Sustainability Center in Taipei, Taiwan. The Company also provides design services in Elk Grove Village, Illinois, U.S.

Forward-Looking Statements

Note: This press release contains forward-looking statements. Words such as “continue,” “anticipate,” “will,” “expect,” “believe,” “plan,” and similar expressions identify forward-looking statements. These forward-looking statements are based on the current expectations of the Company. Because these forward-looking statements involve risks and uncertainties, the Company’s plans, actions and actual results could differ materially. Such statements should be evaluated in the context of the direct and indirect risks and uncertainties inherent in the Company’s business including, but not necessarily limited to, the Company’s continued dependence on certain significant customers; the continued market acceptance of products and services offered by the Company and its customers; pricing pressures from the Company’s customers, suppliers and the market; the activities of competitors, some of which may have greater financial or other resources than the Company; the variability of the Company’s operating results; the results of long-lived assets and goodwill impairment testing; the risks inherent in any merger, acquisition or business combination, including the ability to achieve the expected benefits of acquisitions as well as the expenses of acquisitions; the collectability of aged account receivables; the variability of the Company’s customers’ requirements; the impact of inflation on the Company’s operating results; the availability and cost of necessary components and materials; the impact acts of war may have to the supply chain; the ability of the Company and its customers to keep current with technological changes within its industries; regulatory compliance, including conflict minerals; the continued availability and sufficiency of the Company’s credit arrangements; the costs of borrowing under the Company’s senior and subordinated credit facilities, including under the rate indices that replaced LIBOR; increasing interest rates; the ability to meet the Company’s financial and restrictive covenants under its loan agreements; changes in U.S., Mexican, Chinese, Vietnamese or Taiwanese regulations affecting the Company’s business; the turmoil in the global economy and financial markets; public health crises, including COVID-19 and variants; the continued availability of scarce raw materials, exacerbated by global supply chain disruptions, necessary for the manufacture of products by the Company; the stability of the U.S., Mexican, Chinese, Vietnamese and Taiwanese economic, labor and political systems and conditions; global business disruption caused by the Russian invasion of Ukraine and related sanctions and the Israel-Hamas conflict; currency exchange fluctuations; and the ability of the Company to manage its growth. These and other factors which may affect the Company’s future business and results of operations are identified throughout the Company’s Annual Report on Form 10-K, and as risk factors, may be detailed from time to time in the Company’s filings with the Securities and Exchange Commission. These statements speak as of the date of such filings, and the Company undertakes no obligation to update such statements in light of future events or otherwise unless otherwise required by law.

For Further Information Contact:
SigmaTron International, Inc.
James J. Reiman
1-800-700-9095

FAQ

Why did SigmaTron International (SGMA) receive a delinquency notification from Nasdaq?

SigmaTron International (SGMA) received a delinquency notification from Nasdaq because it failed to timely file its Form 10-K for the fiscal year ended April 30, 2024, violating Nasdaq Listing Rule 5250(c)(1).

What is the deadline for SigmaTron International (SGMA) to submit a compliance plan to Nasdaq?

SigmaTron International (SGMA) must submit a compliance plan to Nasdaq by October 15, 2024, which is 60 calendar days from the notification date.

How long does SigmaTron International (SGMA) have to regain compliance with Nasdaq listing rules?

If Nasdaq accepts SGMA's compliance plan, the company may be granted an extension of up to 180 calendar days from the original Form 10-K filing due date, until February 12, 2025, to regain compliance.

What is the reason for SigmaTron International's (SGMA) late filing of Form 10-K?

SGMA attributed the late filing to ongoing negotiations with lenders regarding amendments to credit agreements, which required additional time to complete year-end close procedures and the Form 10-K preparation.