BackWeb (Nasdaq:BWEB) ( BWEB) is about to be delisted from Nasdaq's main index, but neglected to tell investors. In its quarterly 10Q statement to the Securities and Exchange Commission, the company said that on August 13 it received a warning of its imminent delisting from the Nasdaq listing qualifications staff, after its share price sank below $1 and stayed there over 90 days. Nasdaq warned that BackWeb, which has seen its market cap shrink to a record low of $12 million, would be shifted to the smallcap index from Wednesday, August 21, unless the company appeals. But it never issued an orderly notice to shareholders on the matter. BackWeb, which develops software communications infrastructure, will be appealing, it stated in its 10Q report, which will delay any move by Nasdaq on delisting it from the NM. The company also noted in its 10Q that "There is a substantial risk that we are a passive foreign investment company, or PFIC", which could entail a tax bill for American-resident holders of its ordinary shares. Another development at the Ramat Gan-based company in the last quarter was an exchange of series E preferred shares for ordinary shares, in order to fulfill Israeli regulations regarding listing on the Tel Aviv Stock Exchange. The Israel Securities Authority requires a company to have only one kind of share in order to list financing round trade on the TASE. BackWeb had issued the series E shares in connection with acquiring Lanacom Inc. in July 1997. However, given BackWeb's low current market value, it may opt to defer a listing in Tel Aviv. No comment could be obtained from the company.