Rule 4310(c)(14): The issuer shall file with NASDAQ all reports and other documents required to be filed with the Securities and Exchange Commission ("SEC"). Annual reports filed must contain audited financial statements.
Issue: The company had not filed its Form 10-K or the past two Forms 10-Q and did not provide an estimated date for filing these SEC reports.
Determination: The company was properly delisted for failure to comply with the filing requirement. The Listing Council takes seriously the requirement to file accurate and reliable financial statements and the concomitant purpose to provide
investors with current information regarding the company. Investors in securities listed on NASDAQ are entitled to assume that issuers of those securities will promptly and accurately comply with their reporting obligations under the Securities Exchange Act
of 1934. In this case, however, investors did not have access to accurate financial information regarding the company for more than one year. Furthermore, in the absence of accurate and reliable financial statements, Staff was unable to determine if the company
was in compliance with all of the NASDAQ continued listing requirements.
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Rule 4310(c)(4): $1 minimum bid price requirement for continued listing on the SmallCap Market.
Issue: The bid price of the company’s common stock was below $1 for approximately 21 months. The company planned to effect a 1-for-4 reverse stock split after its annual meeting.
Determination: The company was properly delisted for failure to comply with the minimum bid price requirement. Even if the company effected its planned 1-for-4 reverse stock split, its share price would still be below $1.
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Rule 4350(g): Issuers are required to solicit proxies and provide proxy statements for all meetings of shareholders.
Issue: Although the company recently filed a definitive proxy statement with the SEC, it previously had not filed a proxy statement, or solicited proxies, since its securities were listed on NASDAQ in 2000.
Determination: The company was properly delisted for failure to comply with the proxy solicitation requirements.
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Rule 4310(c)(7): $1,000,000 market value of publicly held shares requirement for continued listing.
Issue: Based on information in the company’s information statement and its most recent stock price, its market value of publicly held shares was less than $1,000,000. The company believed its stock was undervalued.
Determination: The company was properly delisted for failure to comply with the market value of publicly held shares requirement.