FalconStor Software Inc. plans to hold a special meeting to gain stockholders’ approval for a reverse stock split — shrinking the number of shares outstanding — and other measures that would put it back in compliance for continued listing on the Nasdaq Capital Market, the Melville company said in a government filing.
The 23-year-old data-storage company received a delisting notice from Nasdaq in November because its stock price had closed below the minimum level of $1 per share for 30 consecutive days. The following month, Nasdaq notified the company that it failed to meet other requirements such as a minimum $35 million market value of listed securities.
The date of the special meeting and details on the reverse stock split were not specified in the Securities and Exchange Commission filing. FalconStor also said it would seek approval to issue additional shares of common stock.
“Delisting from Nasdaq would likely adversely affect our ability to raise additional financing through the public or private sale of equity securities,” the company said in the preliminary proxy document filed after the stock market close Monday. “Delisting would also likely negatively affect the value and liquidity of our common stock because alternatives, such as the OTC Bulletin Board and the pink sheets, are generally considered to be less efficient markets.”
FalconStor president and chief executive Gary Quinn resigned effective July 1. He was replaced in those roles by Todd Oseth, a former chief executive of Denver-based Intermap Technologies.
Shares of FalconStor tumbled 9.1 percent to close at 25 cents in Tuesday trading. The stock has fallen about 75 percent in the last 12 months.