Business Context and Reporting Period
This Form 8-K is filed by Verb Technology Company, Inc. (referred to in the request as TON Strategy Co) for the reporting date of July 24, 2020. The filing addresses a regulatory notice received from The Nasdaq Stock Market LLC regarding compliance with listing rules.
Key Financial Metrics
The filing text does not provide a clear value for revenue, profit, cash flow, margins, debt, or liquidity. This report focuses exclusively on corporate governance and listing compliance matters rather than financial performance.
Material Changes and Events
On July 24, 2020, the Company received a determination from Nasdaq that it failed to comply with Listing Rule 5635(c), which requires shareholder approval for the issuance of securities under stock option or purchase plans. The non-compliance involved:
- 19 separate option grants for an aggregate of 601,000 shares of Common Stock.
- 14 separate restricted stock grants for an aggregate of 179,675 shares of Common Stock.
The Staff noted that grants to current employees and contractors did not qualify for the exception under Listing Rule 5635(c)(4), and grants intended to qualify failed due to a lack of prompt press release disclosure regarding material terms.
Outlook, Management Commentary, and Risks
The Company submitted a Plan of Compliance to Nasdaq to regain standing. Under this plan, the 780,675 shares associated with the non-compliant grants were removed from award eligibility under the 2019 Omnibus Incentive Plan. Consequently, 1,865,707 shares remain available for future awards. Management believes the Plan of Compliance has been fully effectuated and accepted by Nasdaq, resolving the issues raised. There is no immediate effect on the listing of the Company's Common Stock or Warrants.
Investor Verification Checklist
- Confirm that Nasdaq has formally accepted the Company's Plan of Compliance to avoid potential delisting risks.
- Verify the updated share count available for future awards under the 2019 Omnibus Incentive Plan (stated as 1,865,707).
- Review subsequent filings to ensure no further listing rule violations occur regarding equity compensation disclosures.
- Check if the removal of 780,675 shares from eligibility impacts future employee retention or recruitment strategies.