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  Listing Council Decision 2003-7
Identification Number 673
Rules 4450(a)(3) and 4450(b)(1): $10,000,000 shareholders' equity, or its alternatives, $50,000,000 market value of listed securities or $50,000,000 total assets and $50,000,000 total revenue requirements, for continued listing on the National Market.
 
Issue: The company no longer satisfied the shareholders’ equity requirement for continued inclusion on the National Market and was transferred to the SmallCap Market. The company asserted that it would be in compliance with the National Market shareholders’ requirement after it completed a private placement, and it would be able to maintain compliance throughout 2003 according to its financial projections.
 
Determination: The company was properly transferred to the SmallCap Market for failure to comply with the shareholders’ equity requirement on the National Market. Following the consummation of the private transaction, it appeared that the company’s shareholders’ equity was approximately $11,000,000. However, the company had been deficient with the shareholders’ equity requirement for more than six months. Under Listing Rule 4330(e), a security that has been terminated from NASDAQ must meet the initial listing requirements before re-inclusion. Because the Panel appropriately delisted the company’s securities from the National Market, the initial listing requirements provide the correct standard for a review of the company’s listing qualifications. The company, however, did not meet the National Market initial listing requirements. Furthermore, even under the National Market continued listing requirements, it appeared that the company would be unable to maintain long term compliance with the minimum shareholders’ equity compliance given its history of losses. Although the company projected shareholders’ equity meeting the National Market continued listing requirements throughout 2003, the company did not provide sufficient information in its projections to predict an accurate rate of monthly income or loss. For example, the company did not provide
detailed assumptions for its projections, such as nonrecurring costs or revenues. Based on its net losses for 2002, the company would soon fall below the $10,000,000 shareholders’ equity requirement.
Publication Date*: 7/31/2012 Mailto Link Identification Number: 673
material_search_footer*The Publication Date reflects the date of first inclusion in the Reference Library, which was launched on July 31, 2012, or a subsequent update to the material. Material may have been previously available on a different Nasdaq web site.
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