Business Context and Reporting Period
Company: OptimumBank Holdings, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: November 16, 2018 (Earliest event reported: November 14, 2018)
Context: The Company received a letter from The NASDAQ Stock Market LLC indicating non-compliance with Nasdaq Rule 5635(c) regarding two stock issuances to a director at prices below market value.
Key Financial Metrics
This filing is a current report regarding regulatory compliance and does not contain financial statements. The text does not provide values for revenue, profit, cash flow, margins, debt, or liquidity.
Material Changes and Events
The filing details two specific transactions identified as non-compliant with Nasdaq listing rules:
- Transaction 1 (March 30, 2018): Sale of 20,814 shares of common stock to Board Member Moishe Gubin at $2.21 per share. The market price at the time was $4.12 per share.
- Transaction 2 (April 9, 2018): Issuance of 79,186 shares of common stock in exchange for 7 shares of preferred stock held by Mr. Gubin. The shares were issued to a third party at Mr. Gubin's direction. The Company valued the shares at $2.21 per share against a market price of $4.12 per share.
Current Status: The letter has no immediate effect on the listing of the Company's common stock. The Company is in discussions with Nasdaq staff to remedy the non-compliance.
Guidance, Outlook, and Risks
Remediation Plan:
- For the first transaction, the Company intends to treat the issuance as an equity award under the 2018 equity incentive plan (previously approved by shareholders) and submit this proposal to Nasdaq.
- For the second transaction, the Company intends to develop and submit a compliance plan.
Timeline: The Company has 45 calendar days to submit a plan to regain compliance. If accepted, Nasdaq may grant an extension of up to 180 calendar days to evidence compliance.
Risks and Forward-Looking Statements: The filing includes standard disclaimers that forward-looking statements regarding business plans, financing, and compliance outcomes are subject to uncertainties and risks beyond the Company's control and are not guarantees of future performance.
Investor Verification Checklist
- Verify the status of the Company's discussions with Nasdaq staff regarding the proposed remediation plans.
- Monitor the submission of the compliance plan within the 45-day deadline.
- Confirm whether Nasdaq accepts the proposal to reclassify the March 30, 2018 issuance as an equity award under the 2018 plan.
- Watch for any subsequent filings regarding the potential delisting or extension of the compliance period.