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Frequently Asked Questions
  Listing Council Decision 2002-3
Identification Number 687
Rule 4310(c)(2): $2,000,000 net tangible assets/$2,500,000 shareholders’ equity requirement, or its alternatives, for continued listing on the SmallCap Market.
 
Issue: The company no longer satisfied the net tangible assets/shareholders’ equity requirement. Based on the company’s plan to raise equity in the near term, the Panel determined to continue listing the company’s securities subject to the company providing executed subscription agreements, absent any material contingencies, to the Panel. Following the Panel’s determination, the company definitively stated that it would not be able to enter into binding subscriptions prior to the Panel’s deadline. The Panel then delisted the company. Two days after the Panel’s delisting decision, the company stated that it had received a binding subscription agreement from an investor, which would bring it into compliance with the shareholders’ equity requirement. The agreement was conditioned upon the company maintaining the listing of its securities on The NASDAQ Stock Market at all times prior to the funding.
 
Determination: The company was properly delisted for failure to comply with the Panel’s exception and the net tangible assets/shareholders’ equity requirement. The Panel may provide a company with an exception to the continued listing requirements, if it believes that a company may come into compliance with the requirements in the near term. Once it becomes clear that a company cannot comply with the terms of the exception by the expiration date (even if such information is provided prior to the expiration date), the Panel may in its discretion immediately delist the company. Furthermore, the company’s contemplated transaction pursuant to the subscription agreement did not appear feasible due to the material condition that could not be satisfied.
 
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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. The company believed its common stock price would increase, if its securities were relisted on the SmallCap Market. It also believed that its stock price would rise as a result of recent news announcements related to its products.
 
Determination: The company was properly delisted for failure to comply with the minimum bid price requirement. Anticipated favorable market reaction is not a definitive plan to regain compliance with the minimum bid price requirement.
Publication Date*: 7/31/2012 Mailto Link Identification Number: 687
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