Granite City Food & Brewery Ltd. (NASDAQ: GCFB) announced today that it has received a letter from the Listing Qualifications Staff of The NASDAQ Stock Market notifying the Company that its common stock is subject to delisting from The NASDAQ Capital Market at the opening of business on February 1, 2012, unless the Company requests an appeal of this determination.
The notice stated that the delisting is attributable to the Company’s failure to comply with the minimum shareholders’ equity requirement for continued listing set forth in NASDAQ Listing Rule 5550(b)(1). NASDAQ staff did not accept the Company’s plan for compliance submitted on January 4, 2012.
“We believe our plan for regaining and sustaining compliance merits continued listing of our common stock and we have therefore decided to appeal the staff’s determination to a listing qualifications panel,” said Chief Financial Officer James G. Gilbertson. “We believe that many of the actions we have taken since the CDP transaction have added significant value to the Company and that we are only beginning to see the results of such actions, as reflected in our recently filed Form 8-K/A containing pro forma financials that show the impact of the Cadillac Ranch asset acquisitions.”
The Company anticipates that the listing qualifications panel hearing will be scheduled within the next four weeks.If the Company’s common stock does not continue to be listed on The NASDAQ Capital Market, the shares would become subject to certain rules of the SEC relating to “penny stocks.” Such rules require broker-dealers to make a suitability determination for purchasers and to receive the purchaser’s prior written consent for a purchase transaction, thus restricting the ability to purchase or sell the shares in the open market. In addition, trading, if any, would be conducted in the over-the-counter market in the so-called “pink sheets” or on the OTC Bulletin Board, which was established for securities that do not meet NASDAQ listing requirements. Consequently, selling the shares would be more difficult because smaller quantities could be bought and sold, transactions could be delayed, and security analyst and news media coverage of the Company may be reduced. These factors could result in lower prices and larger spreads in the bid and ask prices for the shares. There can be no assurance that the Company’s common stock will continue to be listed on The NASDAQ Capital Market.