Huadi International Group Co., Ltd. (NASDAQ: HUDI) has fallen below Nasdaq’s dollar floor, and it did so in the same month the U.S. Securities and Exchange Commission approved a separate Nasdaq rule that removes the cure period for the smallest listed companies.
The Wenzhou manufacturer of industrial stainless steel pipes and tubes furnished a Form 6-K on July 17, 2026 attaching a press release confirming that it received a Nasdaq Listing Qualifications Staff Determination Letter on July 14, 2026. The letter said the closing bid price of the company’s ordinary shares had been below $1.00 for 30 consecutive business days, short of the continued listing standard in Nasdaq Listing Rule 5550(a)(2). The company said it was disclosing the letter under Nasdaq Listing Rule 5810(b), which requires prompt disclosure of a deficiency notification.
The clock the company is now running
Nothing changes for trading in the near term. The notice does not immediately affect the listing or trading of the ordinary shares, and under Nasdaq Listing Rule 5810©(3)(A) Huadi has a compliance period of 180 calendar days, running to January 11, 2027, to fix the problem. The cure is mechanical: if the closing bid price reaches at least $1.00 for a minimum of 10 consecutive business days at any point in that window, Nasdaq issues a written confirmation of compliance and closes the matter.
Missing the January date does not end the listing either. The company may become eligible for a second 180 calendar day period, but the conditions tighten. To qualify it must 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 minimum bid price requirement excepted, and it must give written notice of how it intends to cure the deficiency, including by a reverse stock split if one is needed. Any such split has to be completed no later than 10 business days before the compliance period expires. Huadi said it is monitoring the bid price and considering available options.
What the shelf filing records about the float
A shelf registration statement on Form F-3 filed on August 12, 2026 puts numbers on the position. The prospectus states that the aggregate market value of ordinary shares held by non-affiliates, the public float, was approximately $3,919,393, calculated on 4,237,182 ordinary shares held by non-affiliates at $0.925, the closing price on the Nasdaq Capital Market on August 10, 2026. The registration statement covers up to $100,000,000 of securities, but the company notes that while its non-affiliate float stays below $75,000,000 it cannot sell more than one-third of that float in a public primary offering in any 12-month period under General Instruction I.B.5 of Form F-3, and that it has not used that instruction in the preceding 12 calendar months. The prospectus reports 14,319,182 ordinary shares issued and outstanding.
The operating figures reported for the half show a lower top line than the year before. Interim management discussion for the six months ended March 31, 2026, furnished on June 29, 2026, reports revenues of approximately $24.5 million, down about $4.9 million or 16.48% from approximately $29.4 million a year earlier. The company attributed the fall to the economic downturn in China and weaker demand for construction materials, to regional conflict reducing export revenue, and to a lower weighted average selling price set to meet competition. Gross profit fell about $1.2 million or 29.24% to approximately $2.9 million, with gross margin at 11.77% against 13.90%. Selling, general and administrative expenses fell about $0.2 million or 5.47% to approximately $3.5 million. The half ended in a net loss of approximately $1.1 million, a swing of about $1.3 million from net income of approximately $0.2 million a year earlier. Operating activities used $4,296,906 of cash, investing used $5,057,847, and financing supplied $8,713,494.
Analysis: the rule that changed while the letter was in the post
The bid price deficiency is the visible problem. The one worth watching is the market value test the Commission approved on July 27, 2026, ten days after Huadi’s letter. That order approves new Nasdaq Rules 5450(a)(3) and 5550(a)(6) requiring listed companies to maintain a minimum Market Value of Listed Securities of at least $5 million, and amends Rule 5810 so that a company failing that test for 30 consecutive business days receives a Staff Delisting Determination with no cure or compliance period at all. A company in that position goes to a hearings panel rather than into a 180 day window.
The distinction matters for reading Huadi’s own numbers. The $3,919,393 in the F-3 is public float, which counts only shares held by non-affiliates. The MVLS test measures all listed securities, and with 14,319,182 ordinary shares outstanding at $0.925 the company’s MVLS sits materially above its float and above the $5 million line. The two tests are not interchangeable, and a float under $5 million is not by itself an MVLS breach. What the float figure does establish is how thin the tradable base is, and how far the price would have to fall before the second test starts to bind.
The Commission’s own analysis, published in the approval order, gives a sense of how sticky this condition is. Applying the MVLS requirement retrospectively, the number of issuers that would have failed rose from 2 in 2021 to 140 in 2023, easing to 122 in 2024 and 91 in 2025. Of issuers that failed the test, 65% still had an MVLS under $5 million after 180 days, with a median valuation under $3.7 million. The Commission set out that data in the order as part of its basis for approving a requirement with no compliance period.
Two things the disclosure does not establish are worth naming. It does not say what Huadi intends to do, only that options are under consideration, and the reverse stock split language in the press release is the standard recitation of Rule 5810©(3)(A) rather than a stated plan. It also does not connect the shelf to the deficiency: the F-3 was filed within a month of the letter and became effective on August 19, 2026, but the prospectus states no specific use of proceeds tied to compliance. A reader tracking this would watch for a prospectus supplement drawing on the shelf, for any notice of intent to cure filed ahead of January 11, 2027, and for the interim price to hold ten consecutive sessions above a dollar without corporate action.
