UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): October 1425, 2022

SCHMITT INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)


Oregon	001-38964	93-1151989
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

2765 N.W. Nicolai Street Portland, Oregon		97210-1818
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (503) 227-7908

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock – no par value	SMIT	NASDAQ Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 3 1.01. ~~Notice~~ ofEntry ~~Delisting~~Into orMaterial ~~Failure~~Definitive ~~To Satisfy a Continued Listing Rule or Standard; Transfer of Listing~~Agreement.

On ~~September~~October 1425, 2022, Schmitt Industries, Inc. ~~(“we”~~, an ~~“us,”~~Oregon ~~“our”~~corporation or (the “Company”), ~~received~~issued ~~written~~a ~~notice~~Promissory ~~from~~Note ~~the Listing Qualifications Department~~ (the “~~Staff~~Note”) ofin ~~The~~favor ~~Nasdaq~~of ~~Stock~~Sententia ~~Market~~Capital Management LLC (“~~Nasdaq~~Sententia”) ~~notifying~~in usthe ~~that~~principal weamount ~~did~~of ~~not~~$1,000,000 ~~file~~as ~~our~~a ~~Annual Report~~bridge onfinancing ~~Form 10-K~~ for the ~~fiscal~~Company. ~~year~~In ~~ended~~connection ~~May~~with 31the Note, the ~~2022~~Company also entered into a Security Agreement (the “~~Form~~Security ~~10-K~~Agreement”), bydated ~~September~~October 1325, 2022, asamong ~~required~~the ~~for continued~~Company, ~~listing~~Ample onHills ~~the~~Acquisition ~~Nasdaq~~LLC, ~~Capital~~Schmitt ~~Market~~Measurement ~~pursuant~~Systems, toInc. ~~Nasdaq~~and ~~Listing~~Sententia ~~Rule~~to ~~5250(c)(1).~~secure Onthe ~~October~~obligations ~~14,~~under ~~2022,~~the weNote. ~~received~~As ~~written~~previously ~~notice from~~disclosed, ~~Nasdaq~~Sententia ~~notifying~~is usan ~~that,~~entity ~~based~~affiliated onwith ~~the~~Michael ~~October 13~~Zapata, ~~2022~~the ~~filing~~Company’s ofChief ~~Form~~Executive ~~10-K,~~Officer weand ~~were in~~Chairman ~~compliance~~of ~~with~~the ~~Nasdaq Listing Rule 5250(c)(1)~~Board.

OnThe ~~October~~Note ~~14,~~bears ~~2022~~an weinterest ~~received~~rate aof ~~deficiency~~12% ~~letter,~~per year ~~from~~and ~~the~~a ~~Staff~~default interest rate of ~~the~~22% ~~Nasdaq~~per ~~notifying~~year. ~~the~~The ~~Company~~Note ~~that~~matures at the ~~Company’s~~earlier ~~stockholders’~~of ~~equity~~(a) asone ~~reported~~year infrom ~~our~~the ~~Annual~~issuance ~~Report on~~date, ~~Form~~subject ~~10-K~~to ~~for~~two six month extensions at the ~~period~~option ~~ended~~of ~~May~~the 31Company, ~~2022~~or (~~“2022 10-K”~~b), ~~did~~an ~~not~~event ~~satisfy~~of default under the ~~continued~~Note. ~~listing~~Under ~~requirement~~the ~~under~~Note, ~~Nasdaq Listing~~proceeds ~~Rule~~from ~~5550(b)(1)~~any ~~for~~source ~~the~~or series ~~Nasdaq~~of ~~Capital~~related ~~Market,~~or ~~which~~unrelated ~~requires~~sources, ~~that~~including abut ~~listed~~not ~~company’s~~limited ~~stockholders’~~to, ~~equity~~payments befrom ~~at least~~customers, ~~$2.5~~the ~~million.~~issuance Inof ~~its~~equity ~~2022~~or ~~10-K~~debt, the ~~Company~~issuance of ~~reported~~securities ~~stockholders’~~pursuant to an equity line of ~~$605,205,~~credit ~~and,~~of asthe aBorrower ~~result~~or the sale of assets, ~~does~~may ~~not~~be ~~currently satisfy~~used ~~Nasdaq~~to ~~Marketplace~~pay ~~Rule~~down ~~5550(b)(1)~~principal amount of the Note.

InThe ~~accordance~~Note ~~with~~contains ~~Nasdaq rules,~~ the ~~Company~~following ~~has 45~~fees: ~~calendar~~(a) ~~days~~a ~~from~~commitment fee ~~the~~of ~~date~~3% of the ~~notification~~principal toamount; ~~submit a plan to regain compliance with Nasdaq Listing Rule 5550~~(b)~~(1).~~ ~~The~~an ~~Company intends~~exit tofee ~~submit a compliance plan within 45 days~~ of ~~the~~2% ~~date~~ of the ~~notification~~principal ~~and~~amount, ~~will~~(c) ~~evaluate~~an ~~available~~extension ~~options~~fee toof ~~resolve~~3% ~~the deficiency~~of ~~and regain compliance. If~~ the ~~Company’s~~principal ~~compliance~~amount ~~plan~~earned at ~~is accepted,~~ the ~~Company~~exercise ~~may~~of beeach ~~granted~~six-month upextension; toand ~~180~~(d) ~~calendar~~a ~~days from~~monitor ~~October~~fee 14of $10,000 ~~2022~~per toyear ~~evidence~~paid ~~compliance~~in cash.

OnThe ~~October~~foregoing ~~14,~~descriptions ~~2022,~~of the ~~Company~~Note ~~informed~~and ~~Nasdaq~~Security ~~that~~Agreement ~~due~~do not purport to ~~the~~be ~~resignation~~complete ofand ~~Ms.~~are ~~Lillian~~qualified ~~Tung~~in ontheir ~~September~~entirety ~~30,~~by ~~2022~~reference ~~from~~to the ~~Company’s~~full ~~Board~~text of ~~Directors (~~the ~~“Board”), including~~Note ~~the~~and ~~Audit~~Security ~~Committee~~Agreement, copies of ~~the~~which ~~Board,~~are ~~the~~filed ~~Company~~herewith ~~was no longer in compliance with Nasdaq’s audit committee requirements~~ as ~~set~~ ~~forth~~Exhibit ~~in Nasdaq Listing Rule 5605~~10.1 Onand ~~October~~Exhibit 1410.2, ~~2022~~respectively, ~~Nasdaq issued a letter~~ to ~~the~~this ~~Company~~Current ~~confirming~~Report ~~the~~on ~~Company’s~~Form ~~noncompliance with~~8-K ~~Listing Rule 5605~~ and ~~announcing~~are ~~that, consistent with Listing Rules 5605(b)(1)(A) and 5605(c)(4), it would provide the Company a~~incorporated ~~cure~~by ~~period~~reference ~~in order to regain compliance as follows:~~herein.

~~The~~Item ~~Company~~2.03. ~~will~~Creation ~~have:~~of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

·The ~~until~~information ~~the~~set ~~earlier~~forth ofabove ~~the~~in ~~Company’s~~Item ~~next~~1.01 ~~annual~~of this ~~shareholders’~~Current ~~meeting~~Report oron ~~September~~Form ~~30,~~8-K ~~2023;~~is orincorporated by reference herein.

· if the next annual shareholders’ meeting is held before March 29, 2023, then the Company must evidence compliance no later than March 29, 2023.

The Board plans to conduct a search process and intends to appoint an independent director to the Board prior to the end of the cure period.

On October 19, 2022, we received written notice from the Staff of the Nasdaq notifying us that we did not file our Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 2022 (the “Form 10-Q”) by October 17, 2022, as required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5250(c)(1). Under Nasdaq rules, we now have 60 calendar days, or until December 19, 2022, to submit to Nasdaq a plan to regain compliance with the Nasdaq rules. If Nasdaq accepts the plan, we will have until April 17, 2023 to regain compliance. We are working towards finalizing the Form 10-Q and intend to file the Form 10-Q in November to regain compliance.

There can be no assurance that the Company will be able to regain compliance with Nasdaq Listing Rule 5550(b)(1), Nasdaq Listing Rule 5605, Nasdaq Listing Rule 5250(c)(1) or maintain compliance with any other listing requirements. The notifications have no immediate effect on the listing or trading of the Company’s common stock, which will continue to be listed and traded on the Nasdaq Capital Market under the symbol “SMIT”, subject to the Company’s compliance with the other Nasdaq listing requirements.

Item 7.01. Regulation FD Disclosure.

A press release, dated October 20, 2022, disclosing the Company’s receipt of the Nasdaq notification letter and an update on the Company, is attached hereto as Exhibit 99.1.

The information furnished in this Item 7.01 of this Form 8-K (including Exhibit 99.1 attached hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing of Schmitt Industries, Inc. under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Special Note Regarding Forward-Looking Statements

This Form 8-K contains forward-looking statements within the meaning of the federal securities laws, that are, to different degrees, uncertain. Forward-looking statements involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements in this Form 8-K. In addition, please refer to the risk factors contained in our periodic filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended May 31, 2022 and, available at www.sec.gov, under the caption Risk Factors and elsewhere. We do not undertake any obligation to update any forward-looking statements to reflect new information or events or circumstances occurring after the date of this Form 8-K.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

Exhibit	Description
99.1	Press Release of Schmitt Industries, Inc., issued on October 20, 2022.
10.1*	Promissory Note, dated October 25, 2022, in favor of Sententia Capital Management LLC.
10.2*	Security Agreement, dated October 25, 2022, among Schmitt Industries, Inc., Schmitt Measurement Systems, Inc., Ample Hills Acquisition LLC and Sententia Capital Management LLC.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).
*	The exhibits and schedules to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Registrant agrees to furnish supplementally to the SEC a copy of all omitted exhibits and schedules upon its request.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SCHMITT INDUSTRIES, INC.
October 20, 2022	By:	/s/ Philip Bosco
October 28, 2022	By:	/s/ Philip Bosco
		Name: Philip Bosco
		Title: Chief Financial Officer and Treasurer

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