Falconstor Software Inc., a Melville provider of data protection software and services, will not appeal its stock’s delisting from the Nasdaq Stock Market and is applying to move its trading to an OTC (over-the-counter) market, the company said.
The company said in a news release Wednesday that the Nasdaq had given it a May 22 deadline to bring its share price to a minimum of $1. On Thursday, Falconstor shares closed down 7.8 percent to 31 cents.
The company said it also was not compliant with the Nasdaq’s minimum stockholders’ equity requirement, which has a June 6 deadline.
Falconstor trades on the Nasdaq Capital Market, one of Nasdaq’s three market tiers. The Nasdaq Capital Market, focused on small-capitalization companies, requires a minimum of stockholders’ equity of $2.5 million, according to its listing guide. Stockholders’ equity is a statement of a company’s assets minus liabilities.
Falconstor said it applied to the OTC Markets Group, based in New York, for a listing on one of its three market tiers.
The change in trading venue will “ensure a smooth transition in the trading of its common stock and avoid a time consuming and expensive appeal process,” the release said.
The company received an initial delisting notice from Nasdaq in November.
In the quarter ended March 31, Falconstor posted revenue of $6 million versus $7.4 million in 2016 quarter. Net loss narrowed to $1.1 million from $4.3 million in the year-earlier period.