Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule
or Standard; Transfer of Listing.
On August 14, 2014, Giga-tronics Incorporated (the "Company") received a
notification letter from The NASDAQ Stock Market ("NASDAQ") advising the Company
of its failure to comply with the terms of the extension granted to meet the
required minimum of $2,500,000 in shareholders' equity. As a result, the
Company's common stock will be suspended from listing on NASDAQ on the opening
of business on August 25, 2014, unless the Company requests an appeal of
NASDAQ's determination by August 21, 2014.
Previously the Company had received a notification letter from NASDAQ dated
February 12, 2014, advising the Company of its failure to comply with the
required minimum of $2,500,000 in shareholders' equity for continued listing on
The Nasdaq Capital Market, pursuant to NASDAQ listing rule 5550(b)(1). The
Company fell below the minimum requirement with reported shareholders' equity of
$2,044,000 in its Form 10-Q for the quarterly period ended December 28, 2013.
The Company reported shareholders' equity of $540,000 in its Form 10-Q for the
quarterly period ended June 28, 2014.
NASDAQ stated in the February 12, 2014 letter that under the NASDAQ listing
rules the Company had 45 calendar days to submit a plan to regain compliance.
The Company submitted a plan on March 31, 2014, and NASDAQ notified the Company
on April 10, 2014 of NASDAQ's acceptance of the plan and the granting of an
extension to comply with the required minimum of $2,500,000 in shareholders'
equity by August 11, 2014. The terms of the extension required the Company to
complete certain contemplated sales or other transactions by August 11, 2014,
but the Company was unable to do so.
NASDAQ stated in the letter that under the NASDAQ listing rules the Company has
seven calendar days to request an appeal to a hearings panel and to pay a
hearing fee of $10,000. A hearing request will stay the suspension of the
Company's securities pending the hearings panel's decision. The hearing process
typically takes 30 to 45 days.
While the Company intends to appeal and ask for an additional 180 day extension
of time in which to cure the deficiency in shareholders' equity, there can be no
assurance that the Company will be successful with the appeal and the NASDAQ
hearing panel will grant the Company's request for an extension. If the
Company's Common Stock ceases to be listed for trading on the Nasdaq Capital
Market, the Company expects that its Common Stock would be traded on the
Over-the-Counter Bulletin Board on or about the same day or shortly thereafter.