ZK International Receives Nasdaq Notices Regarding Listing Deficiency

Rhea-AI Summary

ZK International Group (ZKIN) received Nasdaq notices regarding minimum bid requirements and not timely filing of annual report. The company has 180 days to regain compliance with the Minimum Bid Price Requirement of $1.00 per share. Failure to comply may lead to delisting.

Positive

• None.

Negative

• ZK International Group faces the risk of delisting from the Nasdaq Capital Market if it fails to meet the Minimum Bid Price Requirement of $1.00 per share within the specified compliance period.
• The company also needs to submit a plan to regain compliance for not timely filing its Form 20-F, with a deadline of April 22, 2024.
• There is uncertainty surrounding ZK International Group's ability to regain compliance with Nasdaq's listing requirements, potentially impacting its stock performance.

Insights

Financial Analyst

The receipt of Nasdaq notices concerning minimum bid price requirements and the delay in filing the annual report on Form 20-F by ZK International is a significant regulatory concern that directly affects investor sentiment and the company's ability to maintain its listing status. In the short term, such notices can lead to increased volatility in the company's stock price as investors may perceive these issues as signs of potential financial instability or operational challenges.

From a financial perspective, the company's failure to maintain the minimum bid price could be indicative of underlying financial distress or a lack of investor confidence. It is essential to note that a prolonged period of non-compliance could result in delisting, which would severely restrict the company's access to capital markets and potentially lead to a decrease in liquidity for existing shareholders. The requirement to maintain a minimum bid price is a common regulatory measure intended to ensure a basic level of market stability and investor protection.

Furthermore, the delay in the filing of the annual report may raise concerns about the company's financial transparency and governance practices. Timely financial reporting is a key component of maintaining market confidence and providing stakeholders with the necessary information to make informed decisions. The potential long-term implications for ZK International include reputational damage and increased scrutiny from both regulators and investors.

Market Research Analyst

When a company like ZK International receives notices regarding non-compliance with stock market regulations, it often signals to the market that there may be deeper operational or strategic issues at play. The market's response to such news can vary, but typically, there is a negative impact on the company's market value as uncertainty takes hold among investors. Market participants will be closely monitoring the company's actions to address these compliance issues, as well as any strategic initiatives to improve its stock performance and resolve the delayed filing of its annual report.

The steel industry, where ZK International operates, is highly competitive and capital intensive, which means that access to capital markets is crucial for funding operations, expansion and innovation. If the company were to be delisted, it could face significant challenges in raising funds, which would have a direct impact on its competitive position in the market. The company's ability to quickly and effectively address these compliance issues will be critical in maintaining investor confidence and ensuring the long-term sustainability of the business.

Legal Expert

From a legal standpoint, the notices received by ZK International from Nasdaq are a clear indication that the company is currently not in adherence with the market's regulatory framework. The legal implications of such non-compliance can be severe. It is crucial for the company to swiftly enact remedial measures to address the deficiencies cited by Nasdaq. The initial and any potential subsequent compliance periods offer a window for the company to rectify these issues, but if unsuccessful, it could face delisting.

Delisting is a legal process that would not only affect the company's stock market presence but also its contractual obligations, investor relations and overall market reputation. The company's intention to monitor its closing bid price and consider available options is a step towards compliance, but it must also prepare for the possibility of an appeal to a Nasdaq Listing Qualifications Panel, which is a legal recourse available to the company in the event of an unsatisfactory resolution. The legal team's role in navigating these regulatory waters is critical to minimize the potential negative consequences of these notices on the company's operations and stakeholder interests.

WENZHOU, China, Feb. 22, 2024 /PRNewswire/ -- ZK International Group Co., Ltd. (Nasdaq: ZKIN) ("ZKIN," "ZK International" or the "Company"), a leading provider of advanced steel products, announced that it received the Nasdaq notices regarding minimum bid requirements and not timely filing of annual report on Form 20-F

On February 15, 2024, the Company received a written notice from the Listing Qualifications Department of the Nasdaq Stock Market, LLC ("Nasdaq") notifying the Company that, based on the closing bid price of the Company's ordinary shares, no par value (the "Ordinary Shares"), for the last 30 consecutive trading days, the Company no longer complies with the minimum bid price requirement for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5450(a)(1) requires listed securities to maintain a minimum bid price of $1.00 per share (the "Minimum Bid Price Requirement"), and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the Minimum Bid Price Requirement exists if the deficiency continues for a period of 30 consecutive trading days.

Pursuant to the Nasdaq Listing Rules, the Company has been provided an initial compliance period of 180 calendar days to regain compliance with the Minimum Bid Price Requirement. To regain compliance, the closing bid price of the Ordinary Shares must be at least $1.00 per share for a minimum of 10 consecutive trading days prior to August 13, 2024, and the Company must otherwise satisfy The Nasdaq Capital Market's requirements for listing.

If the Company does not regain compliance by August 13, 2024, the Company may be eligible for an additional 180 calendar day compliance period. To qualify, the Company would be required, among other things, to meet the continued listing requirement for market value of publicly held shares, which the Company does not currently meet, as well as all other standards for initial listing on the Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and would need to provide written notice of its intention to cure the bid price deficiency during the second compliance period. If the Company does not regain compliance within the allotted compliance period(s), including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that the Company's Ordinary Shares will be subject to delisting. The Company would then be entitled to appeal Nasdaq's determination to a Nasdaq Listing Qualifications Panel and request a hearing.

The Company intends to monitor the closing bid price of the Ordinary Shares and consider its available options to resolve the noncompliance with the Minimum Bid Price Requirement. There can be no assurance that the Company will be able to regain compliance with the Nasdaq Capital Market's continued listing requirements or that Nasdaq will grant the Company a further extension of time to regain compliance, if applicable.

On February 20, 2024, the Company received a written notice from Nasdaq notifying the Company that, since the Company has not yet filed its Form 20-F for the year ended September 30, 2023 (the "Filing"), it no longer complies with Nasdaq Listing Rules for continued listing under Listing Rule 5250(c)(1).

Under Nasdaq Listing Rules, the Company has 60 calendar days to submit a plan to regain compliance and if Nasdaq accepts the Company's plan, Nasdaq can grant the Company an exception of up to 180 calendar days from the Filing's due date, or until August 13, 2024, to regain compliance.

The Company shall submit its plan to Nasdaq no later than April 22, 2024. If Nasdaq does not accept the Company's plan, the Company will have the opportunity to appeal that decision to a Nasdaq Listing Qualifications Panel and request a hearing.

The notices have no immediate effect on the listing of the Ordinary Shares at this time and the Ordinary Shares will continue to trade on the Nasdaq Capital Market under the symbol "ZKIN.".

For more information please visit www.ZKInternationalGroup.com. Additionally, please follow the Company on Twitter, Facebook, YouTube, and Weibo. For further information on the Company's SEC filings please visit www.sec.gov. 

About ZK International Group Co., Ltd.:

ZK International Group Co., Ltd. is a China-based engineering company building and investing in innovative technologies for the modern world. With a focus on designing and implementing next-generation solutions through industrial, environmental and software engineering, ZKIN owns 28 patents, 21 trademarks, 2 Technical Achievement Awards, and 10 National and Industry Standard Awards.  

ZKIN's core business is to engineer and manufacture patented high-performance stainless steel and carbon steel pipe products that effectively deliver high quality, highly-sustainable and environmentally sound drinkable water to the Chinese, Asia and European markets.  ZK International is Quality Management System Certified (ISO9001), Environmental Management System Certified (ISO1401), and a National Industrial Stainless Steel Production Licensee.  It has supplied stainless steel pipelines for over 2,000 projects, which include the Beijing National Airport, the "Water Cube" and "Bird's Nest", which were venues for the 2008 Beijing Olympics.  ZK International is preparing to capitalize on the $850 Billion commitment made by the Chinese Government to improve the quality of water, which has been stated to be 70% unfit for human contact.  

Safe Harbor Statement 

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate" or "continue" or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict and many of which are beyond the control of ZK International.  Actual results may differ from those projected in the forward-looking statements due to risks and uncertainties, as well as other risk factors that are included in the Company's filings with the U.S. Securities and Exchange Commission. Although ZK International believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in forward-looking statements will be realized.  In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by ZK International or any other person that their objectives or plans will be achieved. ZK International does not undertake any obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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SOURCE ZK International Group Co., Ltd.

FAQ

What notices did ZK International Group receive from Nasdaq?

ZK International Group received notices regarding minimum bid requirements and not timely filing of the annual report.

What is the Minimum Bid Price Requirement for ZK International Group's shares?

The Minimum Bid Price Requirement for ZK International Group's shares is $1.00 per share.

What is the deadline for ZK International Group to regain compliance with the Minimum Bid Price Requirement?

ZK International Group has until August 13, 2024, to regain compliance with the Minimum Bid Price Requirement.

What happens if ZK International Group does not regain compliance by August 13, 2024?

If ZK International Group does not regain compliance by August 13, 2024, it may be eligible for an additional 180 calendar day compliance period.

What is the consequence of not timely filing the Form 20-F for ZK International Group?

Not timely filing the Form 20-F may lead to noncompliance with Nasdaq Listing Rules for continued listing.