Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

Rhea-AI Summary

Hallmark Financial Services, Inc. (NASDAQ: HALL) to Voluntarily Delist Shares from Nasdaq Global Market

Financial Analyst

Delisting from a major exchange like Nasdaq is a significant financial event for any publicly traded company. It often reflects underlying business challenges or a strategic pivot towards private ownership. In the case of Hallmark Financial Services, the move to delist will likely reduce the stock's liquidity and visibility, potentially impacting shareholder value. Investors should consider the reasons behind such a decision, as they might range from cost-saving measures to a prelude to more drastic corporate actions like mergers or acquisitions.

Shareholders might face short-term volatility as the market reacts to the delisting news. In the longer term, the absence of Nasdaq's regulatory framework could affect the governance and reporting standards of the company. It's crucial to monitor the company's performance and management's strategic decisions following the delisting, as they will be indicative of the company's future direction and financial health.

Market Research Analyst

Delisting from Nasdaq can be seen as a negative signal to the market, potentially indicating that the company is not meeting the exchange's listing requirements, which could be related to financial viability, corporate governance, or share price levels. For market participants, this event could serve as a cue to reassess the company's fundamentals and market position.

From a market perspective, Hallmark Financial Services' delisting may also affect the overall perception of the industry sector, especially if it prompts investors to scrutinize the financial health of similar companies. The delisting could lead to a reevaluation of the sector's risk profile and potentially trigger a sector-wide stock reassessment.

Legal Expert

The process of delisting involves regulatory considerations, such as the filing of a Form 25 with the SEC, which Hallmark Financial Services intends to do. This legal procedure initiates the formal delisting and it's often followed by a transition to over-the-counter (OTC) trading. Stakeholders should be aware that OTC markets are generally less regulated, which might expose them to higher risks and less stringent disclosure requirements. This could potentially impact the company's compliance obligations and the shareholder's ability to obtain reliable information.

DALLAS, Dec. 26, 2023 (GLOBE NEWSWIRE) -- On December 26, 2023, Hallmark Financial Services, Inc. provided notice to the Nasdaq Stock Market LLC of its intention to voluntarily delist its shares of common stock from the Nasdaq Global Market. Trading of the Company’s common stock will be suspended at the open of business on January 5, 2024. The Company intends to file a Form 25 with the SEC on or about January 5, 2024, with the delisting of its common stock taking effect no earlier than ten days thereafter. The Company’s decision to voluntary delist its shares was based on the Company’s failure to meet two of the requirements for continued listing on the exchange and the lack of a viable plan to remediate both such deficiencies within their established grace periods.

On September 28, 2023, Hallmark Financial Services, Inc. (the “Company”) was notified by Nasdaq Regulation that the Company no longer met Rule 5450(b)(1)(c), which requires listed companies on the Nasdaq Global Market to maintain a minimum “Market Value of Publicly Held Shares” (or “MVPHS”) of at least $5,000,000 in the last 30 consecutive business days. The rules provide the Company a period of 180 calendar days to regain compliance with this requirement, after which the Company will be subject to delisting from the Nasdaq Global Market. The Company could regain compliance with this Rule if the MVPHS of its common stock closes at $5,000,000 or above for at least 10 consecutive business days before the compliance period expires on March 26, 2024.

However, on November 16, 2023, the Company was also notified by Nasdaq Regulation that the Company no longer met Rule 5450(b)(1)(A), which requires companies listed on the Nasdaq Global Market to maintain a minimum of $10,000,000 in stockholders’ equity for continued listing. Under Nasdaq Rules, the Company has 45 calendar days, or until January 2, 2024, to submit a plan to regain compliance (a “Remediation Plan”), which if accepted by Nasdaq could provide the Company an extension of up to 180 days from the date of notice to cure such listing deficiency.

On December 26, 2023, the Company’s Board of Directors determined that there was no viable Remediation Plan that could be presented to Nasdaq by the impending January deadline. In addition, there was significant doubt whether the Company could regain compliance with the MVPHS within the timeframe for that remediation effort. In light of these determinations and in an attempt to effect what the Company sees as an inevitable transition away from Nasdaq in a smooth and cost-efficient manner, the Board approved the delisting of the Company’s Common Stock from the Nasdaq Global Market. The Company expects that its shares of common stock will be quoted on the Pink market, or another market operated by OTC Markets Group Inc. (the “OTC”) so that there continues to be a trading market for its common stock. However, there is no guarantee that a broker will continue to make a market in the common stock or that trading of the common stock will continue on an OTC Market or elsewhere.

The Company intends to continue reporting under the Securities Exchange Act of 1934, as amended, and the delisting of our common stock is not expected to affect the Company’s business operations.

For further information, please contact:
Chris Kenney
Chief Executive Officer
817.348.1600
www.hallmarkgrp.com 

Why is Hallmark Financial Services, Inc. (HALL) delisting its shares from the Nasdaq Global Market?

Hallmark Financial Services, Inc. (HALL) is delisting its shares from the Nasdaq Global Market voluntarily.

When will the trading of Hallmark Financial Services, Inc. (HALL) common stock be suspended?

The trading of Hallmark Financial Services, Inc. (HALL) common stock will be suspended at the open of business on January 5, 2024.

What is the intention of Hallmark Financial Services, Inc. (HALL) behind filing a Form 25 with the SEC?

The intention of Hallmark Financial Services, Inc. (HALL) behind filing a Form 25 with the SEC is related to the voluntary delisting of its shares from the Nasdaq Global Market.