Small-Caps Put on Nasdaq Chopping Block

NEW YORK (TheStreet) -- Penny stocks have gotten punished as investors sold the riskiest shares since the April sell-off. The following 13 companies received notice in December that they failed to trade above $1 a share for a certain period, a Nasdaq requirement, and now they face delisting after a six-month grace period. Their possible fate: languishing on the thinly traded Pink Sheets.

Altair Nanotechnologies ( ALTI)

Closing Price: 30.4 cents (June 29)

Six-Month Stock Performance: -68%

Received Nasdaq Notice: Dec. 22

Management's Expected Action: The lithium-battery maker was granted an additional 180 days to regain compliance with the minimum bid price rule. Altair now has until Dec. 20 to get its stock price to close above $1 for 10 consecutive trading days. The solution may end up being a reverse stock split. Altair said its board of directors has authorized a reverse split in the range of 3-to-1 to 10-to-1, although that plan has been put aside due to the grace period extension. For now, Altair said it "shall continue to seek compliance with the minimum bid price rule through revenue growth and other positive operational achievements."

Atrinsic ( ATRN)

Closing Price: 91 cents (June 29)

Six-Month Stock Performance: 44.4%

Received Nasdaq Notice: Dec. 28

Management's Expected Action: The direct-marketing company was given until June 22 to regain compliance with the Nasdaq's bid price rule, although Atrinsic has not filed with the Securities and Exchange Commission to say whether the exchange has sent a second notification letter. Over the past 180 days, Atrinsic shares have topped $1 several times, but not for 10 consecutive days.

Cascade Bancorp ( CACB)

Closing Price: 48 cents (June 29)

Six-Month Stock Performance: -30.4%

Received Nasdaq Notice: Dec. 17

Management's Expected Action: The holding company for Bank of the Cascades has an appeal hearing with the Nasdaq listing committee on July 22, and the shares will remain listed on the exchange until the completion of the appeal process. Cascade shareholders have approved reverse splits of as much as 10-to-1. However, the bank is first discussing raising additional capital.

China INSOnline ( CHIO)

Closing Price: 35.1 cents (June 29)

Six-Month Stock Performance: -51.6%

Received Nasdaq Notice: Dec. 30

Management's Expected Action: The Chinese Internet services and media company claims its stock has been targeted by so-called naked short-sellers who drove the price down. China INSOnline said it was among stocks on the Nasdaq OMX Group's regulation SHO Threshold Security list. "The result of such actions causes untold financial damage to both the company and shareholders alike," the company said in a statement, adding that it has discussed the possibility of civil action against investors who allegedly manipulated the stock.

Digital Angel ( DIGA)

Closing Price: 47.1 cents (June 29)

Six-Month Stock Performance: -31.8%

Received Nasdaq Notice: Dec. 10

Management's Expected Action: The animal-identification technology company was alerted by the Nasdaq on June 9 that it still has not satisfied the minimum bid price requirement. Digital Angel said it will request a hearing before the exchange's listing-qualifications panel to present its plan to regain compliance. In the meantime, the stock is trading near its 52-week low of 40 cents.

Discovery Laboratories ( DSCO)

Closing Price: 18.8 cents (June 29)

Six-Month Stock Performance: -70.2%

Received Nasdaq Notice: Dec. 2

Management's Expected Action: The biotechnology company said earlier this month its application to transfer its stock to the Nasdaq Capital Market from the Nasdaq Global Market was approved. The company now has until Nov. 29 to boost the share price to more than $1. The rest of June hasn't been kind to Discovery Labs shareholders. A week after its transfer application was approved, shares of the company dropped after it said its new drug candidate, surfaxin, failed to show a significant reduction in the time children with acute respiratory failure spent on mechanical ventilation. Shortly after that, Discovery Labs said it secured a new equity-financing deal with Kingsbridge Capital. On June 17, shares of Discovery Labs dropped further after the company priced a $10 million public offering of 35.71 million units at 28 cents per unit.

First National Bancshares ( FNSC)

Closing Price: 33 cents (June 29)

Six-Month Stock Performance: -52.9%

Received Nasdaq Notice: Dec. 29

Management's Expected Action: The holding company for the First National Bank of the South had until Monday to regain compliance with the Nasdaq's minimum bid price requirement. Like other small-cap regional bank stocks, First National shares rallied in late April, briefly topping $1 a share. However, the stock failed to close above that level for 10 consecutive trading sessions.

First State Bancorporation ( FSNM)

Closing Price: 34.5 cents (June 29)

Six-Month Stock Performance: -20.7%

Received Nasdaq Notice: Dec. 14

Management's Expected Action: The holding company for the First Community Bank received a notice from the Nasdaq on June 15 indicating that it has not regained compliance. First State said it has requested a hearing before the Nasdaq's listing qualifications panel to outline the company's plans to regain compliance. If a second grace period is granted, First State would have until Dec. 12 to satisfy the requirement.

New Generation Biofuels Holdings ( NGBF)

Closing Price: 46 cents (June 29)

Six-Month Stock Performance: -42.5%

Received Nasdaq Notice: Dec. 22

Management's Expected Action: The renewable-biofuels provider had until June 21 to regain compliance with the minimum bid price requirement but failed to do so, even though the company pledged in December to "consider available options." New Generation has yet to acknowledge in a regulatory filing if it has received a second notification from the Nasdaq regarding the rule.

Plug Power ( PLUG)

Closing Price: 49.9 cents (June 29)

Six-Month Stock Performance: -36.8%

Received Nasdaq Notice: Dec. 8

Management's Expected Action: The fuel-cell-systems maker was approved on June 7 to transfer to the Nasdaq Capital Market from the Nasdaq Global Market. Plug Power was also granted an additional 180 days to satisfy the listing requirement. Plug Power said it "intends to monitor the bid price for its common stock and will consider available options to resolve the deficiency and regain compliance."

Repros Therapeutics ( RPRX)

Closing Price: 36.7 cents (June 29)

Six-Month Stock Performance: -46.1%

Received Nasdaq Notice: Dec. 15

Management's Expected Action: The biopharmaceutical company has been granted a July 22 oral hearing to plead its case for an extension after filing an appeal with the Nasdaq. "The company believes that a positive Food and Drug Administration response for its Androxal hypogonadism program will result in an increase in the market cap of the company and hence its share price," Repros said in a statement.

Sterling Financial ( STSA)

Closing Price: 56 cents (June 29)

Six-Month Stock Performance: -6%

Received Nasdaq Notice: Dec. 7

Management's Expected Action: The holding company of Sterling Savings Bank and Golf Savings Bank said on June 8 its stock listing would be transferred to the Nasdaq Capital Market from the Nasdaq Global Market, effective June 10. Sterling Financial now has until Dec. 6 to regain compliance with the minimum bid price rule. "Sterling is evaluating its options," the company said in a statement.

The South Financial Group ( TSFG)

Closing Price: 27.6 cents (June 29)

Six-Month Stock Performance: -58.9%

Received Nasdaq Notice: Dec. 4

Management's Expected Action: The holding company of Carolina First Bank will likely dodge a delisting from the Nasdaq after it agreed in May to be acquired by TD Bank Financial Group ( TD) in a $61 million deal. The South Financial Group's common shareholders will receive either 28 cents in cash or 0.004 share of TD common stock per South Financial Group common share. In the meantime, TSFG's stock listing has been transferred to the Nasdaq Capital Market from the Nasdaq Global Market. If the company does not regain compliance or the acquisition is not completed by Nov. 29, the Nasdaq said it will likely provide written notification to the company that its common stock will be delisted.

-- Written by Robert Holmes in Boston.

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