Free course · Lesson 16 · 4 min

Nasdaq compliance as a dilution clock

$2.5Mthe equity minimum PNDA fell below

Oct 8when its plan to fix it is due

In 4 minutes: the two Nasdaq minimums that matter, the deadline a notice sets, and the usual ways out.

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01Two minimums to stay listed

On the Nasdaq Capital Market, the stock needs a bid of at least $1. The company needs $2.5M of stockholders’ equity, or has to meet one of the alternative tests.

$1minimum bid price

$2.5Mstockholders’ equity: what it owns minus what it owes

On Panda Desk →GC NASDAQ · True / TrueThe second True: PNDA fails a Nasdaq rule right now.

02Miss one, get a notice

Nasdaq sends the company a deficiency notice. The company reports it in an 8-K, under Item 3.01.

On Panda Desk →FILINGS → 8-K Item 3.01 · 32 days agoNasdaq notice: stockholders’ equity below $2.5M.

03The notice sets a deadline

The company gets a deadline to present a plan, or a grace period to fix the problem. PNDA’s plan is due Oct 8.

Aug 24Nasdaq notice: equity below $2.5M
TodayPNDA +41% on a press release
Oct 8PNDA’s plan to regain compliance is due
Thenthe fix: usually new shares

Today sits between the notice and the deadline.

On Panda Desk →AI Insight → Timeline · COMINGOct 8: the Nasdaq equity plan is due.

04Low equity: sell shares

Cash from new shares adds to stockholders’ equity, so selling stock is the usual cure. That is why a Nasdaq notice often ends in dilution.

PNDAequity below $2.5M

new shares

The marketyour tape

cash comes in, and equity goes up

On Panda Desk →DILUTION INSTRUMENTS → ATM · $7.9M/$10.0MAlready in place to sell shares, capped at $2.2M for now by the baby shelf (lesson 5).

05Bid under $1: a reverse split

A low bid is fixed by lifting the price, usually with a reverse split (lesson 17). PNDA already did one.

Equitytoo low: sell new shares

Bidunder $1: reverse split

On Panda Desk →SPLIT · R/S ↑ 20:1 (74d ago)The 1-for-20 split that took PNDA’s bid back above $1.

For the longA deadline puts a date on the raise. A spike before Oct 8 lets PNDA sell new shares at a higher price, into the same run you hold.

063 checks for any Nasdaq notice

Sources

Nasdaq Continued Listing Guide: on the Capital Market, the $1 minimum bid and the $2.5M stockholders’ equity standard, or its alternatives.
Form 8-K, Item 3.01: the item for a notice that the company fails a continued listing rule. An 8-K is due within 4 business days.

Panda Desk shows these rows for any small cap, next to your montage. tspanda.com

Not financial advice. PNDA is fictional, and nothing here is a recommendation to buy or sell.

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