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Another Overland Nasdaq delisting threat

Company now not worth enough

Internet Security Threat Report 2014

Overland Storage was told by Nasdaq on December 15 that its stock would be delisted because its share value was below Nasdaq's $15m minimum.

Overland shares are currently trading at $2.0, giving the company a market capitalisation of $12.68m. Delisting from Nasdaq would affect Overland's creditworthiness, potentially increasing its costs and ability to raise capital. The company has had a 90-day period to regain compliance with this particular Nasdaq rule, which expired on December 14. Overland filed an appeal against the ruling on December 18. This halts the delisting until the Nasdaq Hearings Panel issues a ruling on the appeal.

The Panel can grant Overland an exception for up to 180 days after the Nasdaq Staff’s initial delisting decision to regain compliance with the relevant Nasdaq Global Market standard. Alternatively, it could transfer listing to the Nasdaq Capital Market, but Overland stock does not currently meet the continued listing requirements for the Nasdaq Capital Market, either.

If Overland's appeal fails then it has a fallback process it could follow, which would involve an appeal to the Nasdaq Listing and Hearings Review Council. This body can grant an exception for up to 360 days after the Nasdaq Staff’s initial delisting decision.

Overland needs to get its share price consistently up above $2.37 for it to regain compliance with the $15m minimum company value rule. It has sidestepped a different Nasdaq rule concerning shares having a minimum value of a dollar by engineering a reverse stock split earlier this month. That tactic did not help with the company's market capitalisation and the company is seeking a longer period in which to demonstrate improved trading. Hopefully, this will see a stronger share price increasing the company's value above the $15m.

If Overland CEO Eric Kelly and his team can trade their way up and out of this Nasdaq trap then that would mark a significant turnaround in the beleaguered company's fortunes. To do this they have to have time and hopefully the appeal panel, seeing the company has a new executive team with a strong focus on the sales and marketing side, will grant the time requested. ®

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