Minneapolis-based Kumu receives warning to remove listing from Nasdaq
Minneapolis-based Kumu Corp received an exit notice from Nasdaq for failing to meet the minimum listing standard for $1 per share.
The company has up to 180 days to achieve compliance. The company said in a Securities and Exchange Commission filing on Friday that the notice will not affect its day-to-day operations.
If Qemu shares trade above $1 per share for 10 consecutive days prior to January 23, 2023, Nasdaq, pursuant to its listing rules, will provide the company with written notice that it has regained compliance with the requirement. Is.
Qemu provides cloud-based enterprise software that helps firms manage live and video on-demand content. The company’s shares had a pandemic-fueled surge from spring 2020 to February 2021, as corporate video content increased while workers began working from home.
As of February 2021, the shares had climbed to around $10 a share, but have since declined steadily in price. Shares of Qemu have closed below $1 a share since June 10 and closed at 79 cents a share on Friday.
The fall in the stock market has pushed other small-cap and micro-cap stocks into the delisting zone. Roseville-based Calyxt Inc., Eden Prairie-based Newellis Inc., Egan-based Predictive Oncology Inc. and Regis Corp. received similar notices from their respective exchanges this year.
A public company may receive a delisting notice from their exchange for a number of reasons, but failure to maintain a $1 share price for 30 days is one of the more common ones. No immediate action is taken. Instead, companies have 180 days to raise their share price and after that they can get a 180-extension if they meet other listing criteria and submit an action plan to the exchange.
A common way to meet the $1 per share requirement is to initiate a reverse stock split that increases the share price but reduces the number of shares outstanding.
Companies that get delisted are converted to over-the-counter exchanges. The move could quickly deplete the stock’s liquidity as many funds have regulations on not holding stocks on major exchanges.
In the filing, Kumu said it would monitor the share price and, if required, evaluate available options to achieve compliance.