One problem closed on September 16. Another opened the same day.
Reborn Coffee had been warned in early September that a late quarterly report threatened its Nasdaq listing. It filed that report on September 14, and Nasdaq confirmed two days later that the matter was resolved. The same day, according to an 8-K filed with the SEC on September 22, Nasdaq sent a second letter: the company's stockholders' equity of $735,642 — the net assets left after liabilities — falls well short of the $2.5 million minimum Nasdaq requires for continued listing.
That gap is what matters to anyone holding the stock. Nasdaq's rules give Reborn Coffee until November 2 to submit a compliance plan. If the plan is accepted, the exchange can grant up to 180 calendar days from the date of the notice to actually close the shortfall. If it is rejected, the company can appeal to a Nasdaq hearings panel. The 8-K notes the notice has no immediate effect on the listing of the stock.
The filing also disclosed that Reborn Coffee does not currently meet either of the two alternative routes to compliance — through the market value of its listed securities or through net income from continuing operations — without giving figures for either. That removes the fallback options and leaves the equity figure as the only path the company is working against.
Reborn Coffee said in the filing it intends to submit a plan on time and is evaluating its options, but acknowledged no assurance the plan will be accepted or that compliance can be regained. The filing does not say where the money to close the gap would come from.
Shares closed 16.60% higher at $1.0900 after the filing, on dollar volume of about $338,634.
The compliance plan is due in roughly six weeks. The filing is silent on what it will contain.