On May 10, 2017, Sinovac received a written notice from the Listing Qualifications Department of NASDAQ indicating that the Company is not in compliance with Listing Rule 5250(c)(1) because the Company has failed to file its 2016 Annual Report within four months after the end of year 2016 and does not expect that it will be able to file the 2016 Annual Report within the 15-day extension period.
Under the NASDAQ Listing Rules, the Company has 60 days from the receipt of the letter to submit a plan to NASDAQ as to how it plans to regain compliance with NASDAQ's continued listing requirements. If the Company is still unable to file its 2016 Annual Report by that time, then the Company intends to submit a compliance plan on or prior to that date. If NASDAQ accepts the Company's plan, NASDAQ can grant an exception of up to 180 calendar days from the filing's due date, or until October 30, 2017, to regain compliance. The Company may regain compliance at any time during this 180-day period upon filing with the SEC its 2016 Annual Report, as well as all subsequent required periodic financial reports that are due within that period. If NASDAQ does not accept the Company's plan, Sinovac will have the opportunity to appeal that decision to a NASDAQ Hearings Panel.
The NASDAQ notification letter has no immediate effect on the listing and trading of Sinovac's common shares on the NASDAQ Capital Market.