SANCHEZ ENERGY CORPORATION (OTCMKTS:SNZYP) Files An 8-K Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Ruleor Standard; Transfer of Listing.
As previously disclosed in the Current Report on Form8-K filed by Sanchez Energy Corporation (the “Company”) on December18, 2018, the Company received written notice from the New York Stock Exchange (the “NYSE”) that the Company’s common stock, par value $0.01 per share (the “Common Stock”), had an average closing price per share below $1.00 for 30 consecutive trading days and therefore did not meet the minimum average closing price per share threshold needed to maintain listing on the NYSE under Section802.01C of the NYSE Listed Company Manual (“NYSE LCM”). In accordance with applicable NYSE procedures pertaining to non-compliance due to a low minimum average closing price, the Company notified the NYSE of its intent to pursue actions to meet the minimum average share price requirement and restore its compliance with the relevant standards required in Section802.01C within the six-month period allowed by the NYSE.
Also as previously disclosed, on January3, 2019, the Company received written notice from the NYSE that the Company’s total market capitalization was out of compliance with Rule802.01B of the NYSE LCM, which requires that a company maintain an average market capitalization of at least $50 million over a period of 30 consecutive trading days, unless at the same time the company’s total stockholders’ equity is equal to or greater than $50 million. In accordance with applicable NYSE procedures pertaining to non-compliance due to low market capitalization, the Company had until February19, 2019 to submit a plan to meet the minimum market capitalization requirement within 18 months and restore its compliance with the NYSE continued listing standards.
The Company thereafter did not submit a plan of compliance within the required timeframe to meet the minimum market capitalization requirement. On February20, 2019, the Company received a written notice from the NYSE that, based on the foregoing, the Company’s Common Stock is now subject to delisting proceedings. Although the NYSE LCM provides the Company limited rights to seek a review of the NYSE’s determination, the Company has elected not to seek any such review or otherwise appeal the NYSE’s determination. Trading in the Company’s common stock was suspended at the market opening on February20, 2019. At this time, the Company expects that the NYSE could file a Form25 to delist the Common Stock as early as March7, 2019, following the conclusion of the ten business day review and appeal period. Under Rule12d2-2(d)(1)under the Securities Exchange Act of 1934, as amended, an application on Form25 to strike a class of securities from listing on a national securities exchange will be effective ten days after the filing of the related Form25.
The Common Stock is currently eligible for quotation on the over-the-counter markets and trading in the Common Stock could commence in such markets as early as February21, 2019, although there is no assurance as to when trading may commence or that an active market in the Common Stock will develop. Securities quoted on the over-the-counter markets are not considered to be traded on a national stock exchange. Even if the Common Stock is quoted on an over-the-counter market, the delisting of the Common Stock from the NYSE could negatively impact the Company, as it will likely reduce the liquidity and market price of the Common Stock; reduce the number of investors willing to hold or acquire the Common Stock; negatively impact the Company’s ability to access equity markets and obtain financing; and impair the Company’s ability to provide equity incentives.