CLPS received a Nasdaq deficiency notice on May 27, 2026, after its bid price stayed under $1.00 for 30 days. The 180-day compliance clock runs until November 23, 2026.
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CLPS Incorporation (Nasdaq: CLPS) received a deficiency notice from Nasdaq on May 27, 2026, after its closing bid price stayed below $1.00 per share for 30 consecutive trading days. The notice triggers a 180-calendar day compliance period that runs until November 23, 2026. If CLPS does not regain compliance by then, it may face delisting from the Nasdaq Global Market unless it transfers to the Capital Market and cures the deficiency.
The notification itself does not affect CLPS's current listing or trading. The compliance clock now runs on a stock that has traded in penny-stock territory for over a month. For a small-cap technology company with operations across 10 countries, the risk is not just procedural. It signals a persistent valuation problem that could lead to dilution, liquidity erosion, or eventual removal from the exchange.
Nasdaq Listing Rule 5450(a)(1) requires listed securities on the Global Market to maintain a minimum bid price of $1.00 per share, measured over 30 consecutive business days. CLPS's closing bid price from April 14, 2026 to May 26, 2026 fell short of that threshold, triggering the deficiency letter.
The company disclosed the notice under Nasdaq Listing Rule 5810(b), which mandates prompt disclosure. The compliance clock started on the date of the letter, giving CLPS until November 23, 2026 to cure the deficiency.
To regain compliance, CLPS's common shares must close at or above $1.00 per share for at least 10 consecutive business days. If that happens, Nasdaq will issue written confirmation and the matter closes.
If CLPS fails to meet that standard by November 23, it may still qualify for an additional 180-day compliance period by transferring to the Nasdaq Capital Market from the Global Market. That transfer requires the company to meet all initial listing standards for the Capital Market except the bid price rule, and to notify Nasdaq of its intent to cure. The typical cure mechanism is a reverse stock split.
CLPS stated in the press release that it is committed to taking all reasonable measures, including a reverse share split, to regain compliance. A reverse split mechanically raises the per-share price by reducing the number of outstanding shares. The market often treats such moves as a signal of distress. The post-split price frequently drifts back toward the $1 threshold.
Risk to watch: Reverse stock splits often fail to sustain compliance and can accelerate selling pressure as retail holders exit positions that have been consolidated into fewer, higher-priced shares.
CLPS, headquartered in Hong Kong and founded in 2005, positions itself as a digital transformation provider focused on artificial intelligence, cloud computing, and big data. Its business lines span:
The company operates regional hubs in Shanghai (mainland China), Singapore (Southeast Asia), and California (North America), with subsidiaries in Japan and the UAE.
The press release did not disclose recent revenue, earnings, or cash position. Without those figures, the market must assess CLPS's ability to execute a turnaround purely on stock price trajectory and the compliance timeline.
The source does not specify the catalyst for the decline. The 30 consecutive trading days from April 14 to May 26 cover a period of broad weakness in small-cap Chinese stocks listed in the U.S. Trade policy uncertainty, sector rotation away from unprofitable tech names, and company-specific factors could all have contributed. The lack of a clear recovery catalyst is itself a risk.
CLPS has a structured path with three potential outcomes:
The board will need to decide whether to pursue a reverse split and at what ratio. A split that is too aggressive – say, 1-for-10 or higher – can create a large overhang of odd-lot holders and reduce liquidity. A split that is too modest may not keep the stock above $1 for long.
CLPS is one of many small-cap Chinese companies listed on U.S. exchanges that have struggled to maintain compliance with Nasdaq's $1 bid price rule. The Public Company Accounting Oversight Board (PCAOB) access issues have largely been resolved. Investor skepticism toward China-based micro-caps remains elevated.
Other companies in similar situations often follow a pattern: receive deficiency notice, announce reverse split, see temporary price lift, then drift back toward $1. The ones that survive long-term typically have strong fundamentals and a clear growth story. CLPS has not provided enough financial detail in this release to make that case.
For traders, the key question is whether CLPS can generate enough buying interest to close the gap organically. If not, the reverse split path becomes the default – and that path carries its own execution risk.
For a trader considering CLPS as a potential watchlist item, the decision hinges on the next 10 to 30 trading days. If the stock shows signs of basing above $0.90 and volume picks up, the compliance target becomes plausible. If it continues to drift lower, the probability of a reverse split rises, and the stock may become more volatile rather than more attractive.
CLPS's next quarterly report – due within the compliance period – will be the most important data point. Revenue growth, margin trends, and cash position will tell the market whether the business itself is healthy enough to support a higher stock price.
For now, the deficiency notice is a procedural event with real consequences. The clock is running, and the company's options are limited. Traders should monitor the stock's price action relative to the $1 threshold and the company's public statements about its compliance strategy. A clear, credible plan could stabilize the stock. Silence or delay would amplify the risk.
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Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.