The delisting determination relies on Nasdaq Listing Rule IM-5101-4, which allows the exchange to remove companies if third-party misconduct or price manipulation suggests insufficient liquidity for orderly trading. While the company maintains that Nasdaq has not alleged any direct wrongdoing by the firm itself, the exchange argues that the securities have become too susceptible to manipulation to remain on the board.

Smart Digital Group has until 4:00 p.m. ET on June 24 to file an appeal with the Nasdaq Hearings Panel. If the company fails to act, trading will be suspended on June 26, followed by a formal delisting filing with the SEC. Should the company request a hearing, the current trading halt will persist, but the suspension of the security will be stayed pending the panel's final decision. Management is currently reviewing its legal options and asserts that the exchange's notice has no immediate impact on day-to-day operations or the company’s financial position.