On April 6, 2017, Versar, Inc. (the “Company”) received a letter from NYSE MKT LLC (the “Exchange”) stating that the Exchange has determined that the Company is not in compliance with Section 1003(a)(i) of the Exchange Company Guide (the “Company Guide”) due to the Company’s recently reported stockholders’ equity of $1,068,000 as of July 1, 2016 and net losses in its fiscal years ended July 1, 2014 and July 1, 2016. The letter also issued an early warning of the Company’s potential non-compliance with Section 1003(a)(iv) since the uncertainty regarding the Company’s ability to generate sufficient cash flows and liquidity to fund operations raises substantial doubt about its ability to continue as a going concern.

The letter requires the Company to submit a plan by May 6, 2017 advising of actions it has taken or will take to regain compliance with the continued listing standards by October 6, 2018. If the Company’s plan is accepted by the Exchange, then the Company will be able to continue its listing during the period ending October 6, 2018, during which time it will be subject to periodic reviews, including quarterly monitoring, for compliance with the plan. If the Company does not submit a plan or if the plan is not accepted, delisting proceedings will commence. Furthermore, if the plan is accepted by the Exchange, but the Company is not in compliance with the continued listing standards of the Company Guide by October 6, 2018, or if the Company does not make progress consistent with the plan, then the Exchange staff will initiate delisting proceedings as appropriate. The Company remains subject to the conditions of the letter previously issued by the Exchange on December 12, 2016 requiring that it regain compliance with the Exchange’s requirement to timely file annual and interim reports with the Securities and Exchange Commission by May 31, 2017.

The Company issued a press release on April 12, 2017 stating that it had received the letter from the Exchange.

Item 9.01 Financial Statements and Exhibits

About VERSAR, INC. (NYSEMKT:VSR)

Versar, Inc. is a global project management company providing solutions to government and commercial clients primarily in three business segments: Engineering and Construction Management (ECM), Environmental Services (ESG), and Professional Services (PSG). The Company also provides tailored solutions in harsh environments and offers specialized abilities for classified projects and hazardous materials management. ECM performs Title I Design Services, Title II Construction Management Services and Title III Construction Services. ESG provides full service environmental solutions for project life cycles ranging from a few weeks to more than 15 years in duration and includes Remediation, Compliance, Natural Resources, Cultural Resources, and Unexploded Ordnance/Military Munitions Response Program (UXO/MMRP) Technical Service Areas (TSAs). PSG provides onsite environmental management, planning and engineering services to the Department of Defense (DOD) installations.

VERSAR, INC. (NYSEMKT:VSR) Recent Trading Information

VERSAR, INC. (NYSEMKT:VSR) closed its last trading session down -0.01 at 1.45 with 12,627 shares trading hands.