"This finra issue has made it difficult for us to file a 10K as we still do not have an explanation from finra nor a decision from them as to what they intend to do next. The question remains should the delisting issue be addressed in the 10K or not? As a side note we are working to move to the AMEX or Nasdaq small cap as all indications are the otcbb is falling apart."
"The Nasdaq has three sets of listing requirements. Each company must meet at least one of the three requirement sets, as well as the main rules for all companies.
Listing Requirements for All Companies Each company must have a minimum of 1,250,000 publicly-traded shares upon listing, excluding those held by officers, directors or any beneficial owners of more then 10% of the company. In addition, the minimum bid price at time of listing must be greater than five dollars, and there must be at least three market makers for the stock. Each listing firm is also required to follow Nasdaq corporate governance rules 4350, 4351 and 4360. Companies must also have at least 450 round lot (100 shares) shareholders, 2,200 total shareholders, or 550 total shareholders with 1.1 million average trading volume over the past 12 months.
In addition to these requirements, companies must meet all of the criteria under at least one of the following standards.
Listing Standard No. 1 The company must have aggregate pre-tax earnings in the prior three years of at least $11 million, in the prior two years at least $2.2 million, and no one year in the prior three years can have a net loss.
Listing Standard No. 2 The company must have a minimum aggregate cash flow of at least $27.5 million for the past three fiscal years, with no negative cash flow in any of those three years. In addition, its average market capitalization over the prior 12 months must be at least $550 million, and revenues in the previous fiscal year must be $110 million, minimum.
Listing Standard No. 3 Companies can be removed from the cash flow requirement of Standard No. 2 if the average market capitalization over the past 12 months is at least $850 million, and revenues over the prior fiscal year are at least $90 million."
PV, Steve asked, "The question remains should the delisting issue be addressed in the 10K or not?"
I would say yes the 10K should address it now that it is public knowledge. Originally I would have said no but then I saw one financial notice about the delisting on the Bloomberg Businessweek QTMM page under Key developments for QUANTUM MATERIALS CORP (QTMM) http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=QTMM:US. I think a short explanation of the rule 15c2-11 and that the MM’s are circumventing the fee’s the OTC recently increased by changing trading platforms is good enough. Quantum Materials Corp along with the many other companies being affected have no control or monitoring requirements over how the MM’s execute their daily business. Steve's job is not to play policeman to these MM's, at least that is how I see it. Legally may be another issue. The 10K statement could be as short as: Due to no fault of the company for the delisting on 10-13-10, we are investigating the cause and position taken on rule 15c2-11 by the OTC.BB and will provide a final decision of our actions in the future.
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