Short Term Turbulence Creates Potential Entry Point at $0.45.
Investors appeared to react swiftly to an 8K, which looked a lot like they were facing immediate de-listing from NASDAQ, for having the share price under $1.00 for an extended period of time.
The first 8K went out Jan 25th, 2019 stated “The Notification Letter provides that the Company has 180 calendar days, or until July 22, 2019, to regain compliance with Nasdaq Listing Rule 5550(a)(2). To regain compliance, the bid price of the Company’s common stock must have a closing bid price of at least $1.00 per share for a minimum of 10 consecutive business days. If the Company does not regain compliance by July 22, 2019, an additional 180 days may be granted to regain compliance, so long as the Company meets the Nasdaq Capital Market continued listing requirements (except for the bid price requirement) and notifies Nasdaq in writing of its intention to cure the deficiency during the second compliance period.
The second 8K went out on July 23rd, offered much less detail and hence, looked more ominous. “The Company did not regain compliance with the Rule by July 22, 2019 and, as a result, on July 23, 2019, the Company received notice from the Staff that, based upon the Company’s continued non-compliance with the Rule, the Staff had determined to delist the Company’s common stock from Nasdaq unless the Company timely requests a hearing before the Nasdaq Hearings Panel (the “Panel”). The Company intends to timely request a hearing before the Panel, which request will stay any delisting action by the Staff at least pending the issuance of the Panel’s decision following the hearing and the ultimate conclusion of the hearing process. At the hearing, the Company will present its plan to regain compliance with the Rule and request an extension of time within which to do so.”
We recommend investors read both 8K’s to form their own opinion in addition to talking to a qualified financial advisor for their interpretation.
In our opinion, the briefer filing lead investors to focus on ‘determined’ to delist and not see ‘unless’ (including verbiage ‘a reverse stock split’) which spooked investors who decided to shoot first and ask questions later.
While we have been following the company for a year, and in general feel it appears to be undervalued in relation to its potential, we are just now digging into all of its SEC filings and press releases.
Additions to our various Watch Lists are not ‘buy recommendations’ – but simply a notification to our subscribers that something interesting is afoot, and should be studied and/or monitored.
We have additionally contacted the company with regards to providing ongoing coverage for the company via Institutional Analyst Inc., (an Investor Relations firm) and the Internet Stock Review.
Investors can expect continued volatility during the process of regaining compliance for a continued listing on NASDAQ. At the same, for institutional investors who are looking to establish a significant position in the companies shares, the expected increase in volume may provide such an opportunity – which prior to the current turbulence – had an average daily volume which was prohibitively low to do so.
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