Hovnanian Enterprises, Inc. (NYSE: HOV) said late Friday that it will be requesting shareholder approval at its annual meeting on March 19, 2019 for amendments to its restated certificate of incorporation that will enable the company to conduct a reverse stock split. The reverse split proposal came in response to notification that the company's shares fell below the threshold necessary to be listed on the New York Stock Exchange. Shares of HOV closed at $0.80 on Friday.
"On January 9, 2019, Hovnanian received written notification from the NYSE that the average closing price of Hovnanian's Class A common stock over the consecutive 30 trading-day period ended January 7, 2019 was $0.98, which is below the $1.00 minimum average closing price required by the NYSE's continued listing standard " the company stated.
The details of the proposed reverse stock split are provided in the company's preliminary proxy statement filed with the Securities and Exchange Commission ("SEC") on January 11, 2019.
Hovnanian has a period of six months from the date of the NYSE notification to regain compliance. At any time during the six-month cure period, Hovnanian can regain compliance if, on the last trading day of any calendar month during the cure period, the Company's Class A common stock has a closing share price of at least $1.00 per share and an average closing share price of at least $1.00 per share over the 30 trading-day period ending on the last trading day of that month. During this six-month period, Hovnanian's shares will continue to be listed and traded on the NYSE, subject to Hovnanian's compliance with other NYSE continued listing requirements. Hovnanian will notify the NYSE that it intends to cure the minimum average closing price deficiency during this six-month period.
The NYSE notification does not relate to or affect any of the NYSE's other continued listing criteria, the ongoing business operations of Hovnanian, compliance with its debt instruments or its reporting requirements under the rules and regulations of the SEC.