Rules 4450(a)(3) and 4450(b)(1): $4,000,000 net tangible assets/$10,000,000 shareholders' equity, or its alternatives, the $50,000,000 market value of listed securities/$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 net tangible assets/shareholders' equity continued listing requirement for the National Market. The company also did not comply with the alternative requirements for continued listing under Maintenance
Standard 2 on the National Market, as set forth in Listing Rule 4450(b). The company did not submit a plan to regain compliance with the National Market requirements, but requested that it be granted the opportunity to list its common stock on the SmallCap
Market. The company submitted an unaudited consolidated balance sheet, which reflected shareholders' equity exceeding the SmallCap Market continued listing requirement.
Determination: The company was properly delisted for failure to satisfy the net tangible assets/ shareholders' equity requirement for continued listing on the National Market. The company did not submit a definitive plan to regain compliance
with the net tangible assets/shareholders' equity requirement or to maintain compliance over the long term. The company also did not provide evidence of its ability to sustain compliance with the shareholders' equity requirement for continued listing on the
SmallCap Market in the near or long term and did not meet any of the alternatives for the shareholders' equity requirement, as set forth in Listing Rule 4310(c)(2)(B). The company would soon fall below the shareholders' equity requirement for continued listing
on the SmallCap Market based on its projections and history of losses.
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Rule 4450(a)(5): $1 minimum bid price requirement for continued listing on the National Market.
Issue: The company's bid price was below $1. The company believed that if its common stock were listed on the SmallCap Market, the resulting increase in visibility and liquidity would increase its stock price, so that it could effect a
reverse stock split to regain compliance with the $1 minimum bid requirement.
Determination: The company was properly delisted for failure to comply with the $1 minimum bid price requirement for continued listing on the National Market. The Listing Council is unwilling to rely on anticipated favorable market reaction
in order to find that a company can regain compliance with the minimum bid price requirement. Although the company received shareholder approval for a reverse stock split more than eight months prior to the decision, the company did not announce a definitive
date to effect such a reverse stock split.
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Rule 4450(a)(2): Market value of publicly held shares of $5,000,000 for continued listing on the National Market.
Issue: The market value of publicly held shares of the company’s common stock was below $5,000,000 for more than four months. The company requested that it be granted the opportunity to list its common stock on the SmallCap Market.
Determination: The company was properly delisted for failure to comply with the market value of publicly held shares requirement. The company had not submitted a definitive plan to regain compliance with the publicly held shares requirement
or maintain compliance over the long term. Although the company’s market value of publicly held shares exceeded the SmallCap continued listing requirements, the company failed to evidence compliance with all of the SmallCap Market standards for continued listing.
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Rules 4350(c) and 4350(d)(2): Independent director and audit committee composition requirements.
Issue: For more than four months, the company's audit committee was only comprised of two members. The company stated that it expected to appoint a qualified audit committee member in the near future.
Determination: The company was properly delisted for failure to demonstrate compliance with the independent director and audit committee composition requirements. As of the date of the Listing Council's meeting on this matter, the company
had not announced the appointment of a new independent director.