After reviewing the appropriate NASDAQ Listing Requirements and
Marketplace Rules, I conclude that TASA is currently in compliance with
the new NASDAQ listing requirements, although they will be out of
compliance unless their bid price moves to $1.00 or above before
February 5th. If this does not happen, it appears thatTASA will move
into a 90 day "grace period" during which it may return to compliance
due to market action (or a reverse split if one is needed). This "grace
period" will be over in early May. If they are unable to come back into
compliance at that time, a lengthy delisting process will begin, which will
certainly be a long drawn-out affair, especially if there are several
hundred other small cap companies in a similar situation.
Let me lay all of this out in a bit more detail......
In a statement on its web site NASDAQ lays out the "Current Nasdaq
Listing Requirements" which it states are "effective August 22, 1997". It
further states that "Companies failing to satisfy the new continued listing
requirements will be allowed until February 23, 1998 to meet the new
requirements. Companies should initiate appropriate corporate action
necessary to achieve full compliance by February 23, 1998."
The new regulations themselves are laid out in NASDAQ Marketplace
Rules, also on that site. Rule 4310. Qualification Requirements for
Domestic and Canadian Securities, Section (c) (4) states that:
(4) For initial inclusion, common or preferred stock shall have a
minimum bid price of $4 per share. For continued inclusion the
minimum bid price per share shall be $1.
Section (c) (8)(B) of the same Rule states that:
(B) A failure to meet the continued inclusion requirements for
minimum bid price and market value of public float shall be
determined to exist only if the deficiency for the applicable
criterion continues for a period of 30 consecutive business
days. Upon such failure, the issuer shall be notified promptly
and shall have a period of 90 calendar days from such
notification to achieve compliance with the applicable
continued inclusion standard. Compliance can be achieved by
meeting the applicable standard for a minimum of 10
consecutive business days during the 90 day compliance
period.
These materials can be found at:
nasdaq.com
Now, it is my belief that TASA came into compliance with Section (c) (4)
on December 2, 1997, when its bid moved over $1.00. Although its bid
dropped below $1.00 on January 6, 1998, my reading of Section
(c)(8)(B) of Rule 4310 indicates that it will only be out of compliance "if
the deficiency for the applicable criterion continues for a period of 30
consecutive business days" and that the Company "shall have a period
of 90 calendar days from such notification to achieve compliance with
the applicable continued inclusion standard." Compliance will constitute
a bid price of $1.00 or better for "a minimum of 10 consecutive business
days".
Now, in the event that TASA were to be "delisted", NASDAQ would need
to carry out a fairly lengthy process, as outlined in the Nasdaq Listing
and Hearing Review Committee Procedures:
A.Nasdaq Board Procedures
1.Listing/Delisting Decisions -- Any initial decision of
Nasdaq staff concerning the listing or delisting of
securities on The Nasdaq Stock Market may be
appealed to the Nasdaq Listing and Hearing Review
Committee ("Listing Committee") within 15 calendar
days, or called for review by any member of the Listing
Committee within 45 days, as set forth in the Code of
Procedure. A decision of the Listing Committee may be
called for review by any member of the Nasdaq Board
not later than its meeting next following the Listing
Committee's decision. A decision of the Nasdaq Board
may be called for review by any member of the NASD
Board not later than its meeting next following the
Nasdaq Board's decision but which is 15 calendar days
or more following the decision of the Listing Committee
or the Nasdaq Board. Any decision not appealed or
called for review shall become the final action of the
Association upon expiration of the time allowed for
appeal or call for review. An issuer has the right to
appeal a final action of the Association taken by the
Listing Committee, Nasdaq Board or NASD to the SEC.
A complete copy of these Procedures can be found at:
nasdaq.com
Bob Davis
The Napeague Letter
napeague.com |
