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  Listing Council Decision 2005-4
Identification Number 615
Rule 4310(c)(2)(B): For continued inclusion on The NASDAQ Capital Market, the issuer shall maintain:
(i) stockholders' equity of $2,500,000; (ii) market value of listed securities of $35,000,000; or (iii) net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years.
 
Issue: At the time of the Panel decision, the company did not meet the minimum stockholders' equity requirement or its alternatives for continued listing on The NASDAQ Capital Market. The company had been deficient for over six months, its plan to raise equity was not definitive, and the sale of a subsidiary would not close for at least another quarter. The company also argued that it could evidence compliance by demonstrating $500,000 in net income from continuing operations by the end of its third quarter.
 
Determination: The company was properly delisted because at the time of the Panel's decision the company was not able to demonstrate compliance with the minimum stockholders' equity requirement or its alternatives, The company's plans to increase its stockholders' equity were not sufficiently definitive because: (i) the company did not provide any documentation regarding potential sales of equity, which could be accomplished in the short-term and (ii) the sale of a company subsidiary would not close for at least another three months. The Listing Council also rejected the company's position that it could demonstrate compliance with the $500,000 net income from continuing operations alternative in the Rule by the end of the third quarter of 2005. The Listing Council noted that the Rule requires a demonstration of net income from continuing operations in the most recently completed fiscal year or in two of the last three most recently completed fiscal years, and, as such, the Rule does not provide for compliance on a prospective basis. Consequently, the company would not be able to demonstrate compliance before its 2005 fiscal year end.
 
Publication Date*: 7/31/2012 Mailto Link Identification Number: 615
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