Gridsum Receives Nasdaq Notice Regarding Non-Compliance With Minimum Bid Price Requirement

Gridsum Holding Inc., a leading provider of cloud-based big-data analytics and artificial intelligence (“AI”) solutions in China, announced that on April 17, 2020, it received a letter from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”), indicating that for the last thirty consecutive business days, the bid price for the Company’s American depositary shares (the “ADSs”), each representing one Class B ordinary share of the Company, had closed below the minimum $1.00 per ADS required for continued listing under Nasdaq Listing Rule 5550(a)(2).

The Nasdaq Letter has no immediate impact on the listing of the ADSs on Nasdaq. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has been granted a 180-calendar day grace period to regain compliance with the minimum bid price requirement. The continued listing standard will be met if the closing bid price of the ADSs is at least $1.00 per ADS for a minimum of ten consecutive business days during such compliance period.

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The Nasdaq Letter further indicated that Nasdaq filed an immediately effective rule change with the U.S. Securities and Exchange Commission on April 16, 2020. Pursuant to the rule change, Nasdaq tolled the compliance period for bid price and market value of publicly held shares requirements through June 30, 2020. As a result, the 180-day compliance period will be reinstated on July 1, 2020, and expire on December 28, 2020. Accordingly, if at any time during the tolling period or the 180-day compliance period the closing bid price of the Company’s ADSs is at least $1.00 per ADS for a minimum of ten consecutive business days, the Company will regain compliance with Nasdaq Listing Rule 5550(a)(2), and Nasdaq will provide the Company with written confirmation of compliance.

If the Company does not regain compliance with Rule 5550(a)(2) by December 28, 2020, the Company may be eligible for an additional 180-calendar day compliance period. To qualify, the Company must submit to Nasdaq an application to transfer its Nasdaq listing from the Nasdaq Global Select Market to the Nasdaq Capital Market. Additionally, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split if necessary. However, if Nasdaq concludes that the Company will not be able to cure the deficiency, or if the Company determines not to submit a transfer application or make the required representation, Nasdaq would notify the Company that its securities will be subject to delisting. In the event of such a notification, the Company may appeal Nasdaq’s determination to delist its securities, but there can be no assurance that Nasdaq would grant any request for continued listing.

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The Company intends to monitor the bid price of its ADSs and consider available options if its ADSs do not trade at a level likely to result in the Company regaining compliance with Nasdaq Listing Rule 5550(a)(2) by December 28, 2020. However, there can be no assurance that the Company will be able to regain compliance or that Nasdaq will grant the Company a further extension of time to regain compliance, if necessary.

This announcement is made in compliance with Nasdaq Listing Rule 5810(b), which requires prompt disclosure of receipt of a deficiency notification.

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