Lightbridge Corp (NASDAQ:LTBR) has chosen to put up a fight to keep its listing on NASDAQ. But as the hearing of its petition begins on June 21, it is not difficult to see the risks that the company faces in the determination of its stay or delisting from NASDAQ stock market.
Late last year, NASDAQ informed Lightbridge Corp (NASDAQ: LTBR) that it was no longer in compliance with requirements for continued listing on the market. The company was given room until June 8 to regain compliance or risk delisting. Nothing to mitigate the threat happened during the grace period to enable the company to escape the threat of being struck from NASDAQ stock market.
When the letter of delisting determination came on June 10, the management of LTBR decided to put up a fight. There is a provision in the listing regulations that allow a company to petition its delisting determination and when that happens, a hearing is held. So, LTBR chose the hearing path and the hearing proceedings will start tomorrow June 21.
Potential adverse impact on the stock
While the stock of Lightbridge Corp (NASDAQ: LTBR) will not be delisted from NASDAQ until the hearing is concluded, the company still faces multiple risks. If the hearing turns up the verdict that the stock should not be delisted, it would be a much-needed rescue package for the management and shareholders of the company. But if the hearing determines that the delisting stays, it would nearly destroy the stock.
In a recent regulatory filing, Lightbridge Corp (NASDAQ: LTBR) highlighted the risks it faces if its stock is delisted from NASDAQ. One of them is that there will be limited room for the company to secure market quotation for its stock listing. The other threat is that LTBR risks being seen as a penny stock, which will douse investor appetite for stock. A penny stock status will also introduce tougher rules for brokers dealing in the stock to comply with.
LTBR will also lose analyst coverage and also have its fundraising options significantly reduced when it is delisted. These are risks that the management hopes that NASDAQ’s hearing panel will consider before the determination to delist the stock.
Grounds for delisting Lightbridge Corp (NASDAQ: LTBR)
Lightbridge Corp (NASDAQ: LTBR) faces threat of delisting on the grounds that its stockholder equity has fallen below the minimum required and also because its bid price has dropped below the lowest level allowed on NASDAQ.