The COVID-19 pandemic has brought economic pain to many a broadcast media company.
In the case of African American-focused media entity Urban One, it now includes a notice from Nasdaq that its Class D common stock is not in compliance with its listing rule.
The company led by President/CEO Alfred Liggins III on May 12 received a written notification from the Nasdaq Stock Market indicating that Urban One’s shares were no longer in compliance with Nasdaq Listing Rule 5550(a)(2).
That’s because the company’s Class D shares closing bid price was below $1.00 per share for the previous 30consecutive business days.
Importantly, Urban One’s Class A common stock was not impacted by the Notice and remains in compliance with all listing requirements. That’s the issue trading as “UONE” that closed at $1.30 on May 14.
The Nasdaq note pertains to “UONEK,” which was $1.95 at the start of 2020 and today closed at $0.6260.
Nasdaq rules give Urban One a 180-calendar day compliance period, or until Nov. 8, 2020, to regain compliance with the minimum bid price requirements with respect to its Class D shares.
However, Nasdaq noted that due to the recent COVID-19 outbreak, “the last few weeks have been marked by unprecedented turmoil in U.S. and world financial markets. While the equity markets have functioned well, this turmoil has significantly impacted investor confidence resulting in depressed prices for companies that otherwise remain suitable for continued listing.”
Given the extraordinary market conditions due to COVID-19, Nasdaq determined to toll the compliance periods for the bid price and market value of publicly held shares requirements through June 30, 2020.
As a result, the compliance periods for the Price-based Requirements will be reinstated on July 1, 2020 and, therefore, the Company’s deadline to regain compliance with the closing bid price standard with respect to shares of its Class D common stock has been extended to December 28, 2020.
During the tolling and compliance periods, the Company’s shares of Class D common stock will continue to be listed and traded on the Nasdaq Capital Market.
To regain compliance, the closing bid of the Company’s Class D shares of common stock must meet or exceed $1.00 per share for at least 10 consecutive business days during the tolling period and the 180-calendar day compliance grace period.
This means that compliance is required by Dec. 28, 2020, yet Urban One may be eligible for a second 180 calendar day grace period. To qualify, the company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the minimum bid price requirements. In addition, Urban One would be required to notify Nasdaq of its intent to cure the minimum bid price deficiency by effecting a reverse stock split, if necessary.
Urban One says it intends to monitor its closing bid price for its Class D common stock between now and Dec. 28, and will consider available options to resolve the Company’s noncompliance with the minimum bid price requirement, as may be necessary.
While Urban One has put a reverse stock split on the agenda for its 2020 Annual Meeting of Shareholders, there can be no assurance that the company will be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with other Nasdaq listing criteria.