Nasdaq Stock Market LLC has started delisting procedures for RMG Networks Holding Corp.'s securities after denying the latter's request to extend its listing on the stock market exchange.
RMG said it intends to submit an appeal request on or before Sept. 5, according to a Form 8-K filing.
The news comes after RMG failed to comply with Nasdaq listing rules on two separate occasions. RMG, in early August, lost three directors over a voting disagreement concerning an acquisition proposal from Hale Capital Partners LP, which left the company with only one independent director and no members remaining on its audit and compensation committees. This prompted Nasdaq to notify the company of its noncompliance with the exchange's listing standards concerning governance and gave RMG until Aug. 23 to submit a plan to reach compliance with the listing requirement.
RMG also failed to comply with the minimum $2.5 million stockholders' equity requirement for continued listing, prompting Nasdaq to send another notification to the company Aug. 21.
RMG on Aug. 23 requested Nasdaq to grant an extension so that the company's common stock could remain listed on Nasdaq until the company could complete its current business plans, which include the completion of a going-private transaction and the concurrent delisting of the company’s securities from Nasdaq.
However, Nasdaq on Aug. 29 said that it is denying the request for continued listing after reviewing RMG's submission and noting that the submitted written materials did not include any plans from the company to regain compliance with the governance rules while it remains a Nasdaq-listed company. RMG's failure to comply with the stockholders' equity rule also serves as another basis for delisting, the stock exchange added.
If RMG does not appeal Nasdaq's decision, trading of its common stock will be suspended Sept. 7 at the opening of business, with Nasdaq submitting a Form 25-NSE to the SEC that will remove the company's securities from Nasdaq listing and registration.
If the company decides to appeal the decision, it must submit an appeal request by 4:00 p.m. ET on Sept. 5.