19 Stocks Slapped With Delisting Warnings

Updated from Feb. 8 with eDiets.com delisting notice.

BOSTON ( TheStreet) -- U.S. stocks started off the year with a winning January, as the S&P 500, Nasdaq and Dow Jones Industrial Average posted gains of as much as 2.7%, or more than 30% on an annualized basis, twice last year's increase.

Small-cap stocks fared even better, with the Russell 2000 Index rising more than 3%, as an acceleration in global economic growth attracted investors to companies that can produce outsized profits. Lost amid the euphoria is the fact that small companies pose risks rarely present at larger peers. In fact, 19 stocks trading on the technology-heavy Nasdaq this year have been alerted of deficiencies that could force a delisting.

Those deficiencies range from violations of the minimum bid-price rule, as share prices of some penny stocks have languished below $1, to violations of audit-committee requirements, market value, proxy solicitation or even public interest.

Companies faced with a delisting typically see a detrimental effect on share prices. For instance, the New York Stock Exchange in January delisted the stock of Capitol Bancorp. The company's shares traded for $3 a year ago, but now can be bought for 25 cents on the Pink Sheets.

Still, because companies on exchanges' watch lists record higher-than-average volatility, risk-friendly investors have the chance to make lots of money, either by shorting the stocks on expectations shares will fall, or going long on the hopes they will live to fight another day. Fifteen companies listed on the Nasdaq received delisting warnings in December, and those stocks fell by an average 10% over the past three months. Community Central Bank ( CCBD) was the biggest loser, down 53%, while Star Buffet ( STRZ) rallied more than 70% during the same period.

Nevertheless, all 19 companies were notified in January that they're in violation of listing requirements and could be delisted from the Nasdaq. The following companies now have a limited window of time to regain compliance with the exchange's listing rules.


Educational Development ( EDUC)

Company Profile: Educational Development is a publisher of a line of children's books in the U.S.

Current Share Price: $6.80 (Feb. 7)

Listing Violation: Audit committee composition. The listing rule requires that a majority of the board of directors must be comprised of independent directors and that the company's audit committee have at least three members, all of whom must be independent.

Received Nasdaq Notice: Jan. 3

Management's Expected Action: Educational Development has until its next annual meeting to regain compliance with the listing requirement. "The board is currently considering candidates and intends to appoint an independent director to fill the vacancy on the board and the audit committee as soon as possible," the company said in a regulatory filing. The company said it expects that to occur before the next annual meeting.

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Hauppauge Digital ( HAUP)

Company Profile: Hauppauge Digital makes analog and digital television tuner products for personal computers. Earlier this month at the Consumer Electronics Show in Las Vegas, the company introduced tuner devices that stream live television to the Apple ( AAPL) iPad and iPhone, which boosted shares by more than 50%.

Current Share Price: $2.66 (Feb. 7)

Listing Violation: Minimum stockholders' equity. The Nasdaq Global Market requires a minimum stockholders' equity of $10 million for continued listing.

Received Nasdaq Notice: Jan. 3

Management's Expected Action: Hauppauge Digital has until Feb. 17 to submit a plan to the Nasdaq to regain compliance with the minimum stockholders' equity listing requirement. The company can submit for approval a plan to regain compliance. If the plan is accepted, the Nasdaq can grant an extension of up to 180 days. Otherwise, the company would have to appeal to the Nasdaq's listing panel. Hauppauge Digital also noted that it can apply for a transfer to the Nasdaq Capital Market by Feb. 17, adding that it believes it meets such continued listing requirements of the Nasdaq Capital Market.


Vitacost.com ( VITC)

Company Profile: Vitacost.com is an online retailer and direct marketer of health products, including dietary supplements, metabolites, cosmetics, organic body and personal-care products, sports nutrition and health foods. In December, Vitacost.com revealed that financial statements over the past 16 years can't be relied upon due to accounting problems, and that management is considering a prepackaged Chapter 11 reorganization.

Current Share Price: $5.70 (Feb. 7)

Listing Violation: Annual shareholder meeting and proxy solicitation. Vitacost.com has not held its annual meeting of stockholders within the timeframe allowed under the Nasdaq's continued listing rules. Vitacost.com is also in violation of the Nasdaq's listing requirements over a public interest concern from December and a delinquent quarterly filing in November.

Received Nasdaq Notice: Jan. 3

Management's Expected Action: Vitacost.com said it intends to address this issue at a hearing before the Nasdaq Hearings Panel, although no timetable was given. In December, Vitacost.com revealed in a regulatory filing that the Nasdaq has determined that "continued listing of the Company's securities on The Nasdaq Stock Market is no longer warranted."

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Siebert Financial ( SIEB)

Company Profile: Siebert Financial

Current Share Price: 53 cents (Feb. 7)

Listing Violation: Market value of publicly held shares. The Nasdaq requires that companies maintain a minimum $5 million market value of publicly held shares for continued listing. The Nasdaq's calculation excludes outstanding common stock owned by officers, directors or beneficial owners. Muriel Siebert, chairwoman and CEO of Siebert Financial, currently owns 89.6% of the outstanding common stock of the Siebert Financial.

Received Nasdaq Notice: Jan. 4

Management's Expected Action: Siebert Financial has until July 5 to regain compliance with the listing requirement. The company said it hasn't yet determined whether to take other action in response to the notification letter, and it intends to actively monitor the market value of publicly held shares between now and July 5.


INX ( INXI)

Company Profile: INX is a technology-infrastructure company, aiding enterprises with network routing and switching, wireless networking, and network security solutions. INX also provides Internet protocol (IP) network-based voice or telephone solutions, as well as IP network-based video communications solutions.

Current Share Price: $7.14 (Feb. 7)

Listing Violation: The most recent of INX's six listing violations stems from proxy solicitation and annual shareholder meeting. INX is facing four separate listing violations for delinquency in filing quarter financial statements, dating back to the quarter ended Dec. 31, 2009.

Received Nasdaq Notice: Jan. 5

Management's Expected Action: The Nasdaq Listing Panel already has granted continued listing of INX's securities on the Nasdaq through April 11, as the company works to regain compliance with the listing requirements. "While the company is taking steps to regain compliance in accordance with the Panel's decision, there can be no assurances that the company will be able to do so," INX said in a statement.

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Fuqi International ( FUQI)

Company Profile: Fuqi International designs precious-metal in China. Fuqi gained listing in the U.S. through a reverse takeover, a process that has come under fire by short sellers and is a subject of an SEC investigation.

Current Share Price: $5.24 (Feb. 7)

Listing Violation: Proxy solicitation. The Nasdaq found that Fuqi has not solicited proxies or held its annual meeting of stockholders within the timeframe required under the Nasdaq's listing rules. Fuqi faces four other listing violations relating to delinquent quarterly financial filings dating back to quarter ended Dec. 31, 2009.

Received Nasdaq Notice: Jan 5.

Management's Expected Action: On Jan. 25, Fuqi said the Nasdaq has granted a request for an extension of time to comply with the annual shareholder meeting and proxy solicitation. Fuqi now has until May 9 to proxies and hold its annual meeting. The next deadline for Fuqi comes on March 28, as the company must file all delayed reports and any required restatements to the Securities and Exchange Commission.


OptimumBank Holdings ( OPHC)

Company Profile: OptimumBank operates as the bank holding company for OptimumBank, which provides community banking products and services to individuals and corporate customers in the Broward, Miami-Dade and Palm Beach counties of Florida.

Current Share Price: $2.60 (Feb. 7)

Listing Violation: Board independence. The listing rule requires the board of directors to have a majority of members who are independent. Independent director Jack Calloway resigned from OptimumBank's board of directors on Jan. 6, leaving the company with only three independent directors on its six member board.

Received Nasdaq Notice: Jan. 10

Management's Expected Action: OptimumBank said it is actively seeking a qualified independent director to fill the vacancy on its board of directors. The Nasdaq listing rule provides the company with a cure period until either its next annual shareholders' meeting or Jan. 6, 2012, whichever is earlier. If the next annual shareholders' meeting is held before July 5, a resolution must come no later than that date.

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Cascade Microtech ( CSCD)

Company Profile: Cascade Microtech makes wafer-probing and test-socket products for the electrical measurement and testing of high performance chips.

Current Share Price: $6.56 (Feb. 7)

Listing Violation: Audit committee composition. The listing rule requires that a majority of the board of directors must be comprised of independent directors and that the company's audit committee have at least three members, all of whom must be independent. Director Keith Barnes resigned from the board effective Dec. 31, reducing the company's audit committee from three members to two.

Received Nasdaq Notice: Jan. 11

Management's Expected Action: Cascade Microtech said it expects to regain compliance with the requirements of the listing rule before June 29, as required by the Nasdaq.


Brooklyn Federal Bancorp ( BFSB)

Company Profile: Brooklyn Federal operates as the holding company for Brooklyn Federal Savings Bank, which provides various banking products and services in Brooklyn, Nassau, and Suffolk, New York.

Current Share Price: 86 cents (Feb. 7)

Listing Violation: Market value of publicly held shares and delinquency. The Nasdaq requires that companies maintain a minimum $5 million market value of publicly held shares for continued listing. The Nasdaq's calculation excludes outstanding common stock owned by officers, directors or beneficial owners. Brooklyn Federal also did not file its annual 10-K filing with the SEC in a timely manner, prompting a separate warning from the exchange.

Received Nasdaq Notice: Jan. 12

Management's Expected Action: Brooklyn Federal said that its 10-K filing has been delayed due to the resignation of the company's independent registered public accounting firm Dec. 20. The company's audit committee has initiated the process of selecting a new registered public accounting firm. Brooklyn Federal has 60 days from the receipt of the Nasdaq's first letter to submit a plan for approval. If approved by the Nasdaq, the company would have 180 days to regain compliance. In regards to the minimum market value rule violation, the company has 180 days from the receipt of that letter to regain compliance.

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Point.360 ( PTSX)

Company Profile: Point.360 is an integrated media-management-services company that provides film, video and audio post-production, archival, duplication, computer graphics, and distribution services.

Current Share Price: 86 cents (Feb. 7)

Listing Violation: Bid price. The listing rule requires that a company maintains a minimum closing bid price of $1 per share for its common stock. Point.360 shares last closed above $1 on Dec. 2.

Received Nasdaq Notice: Jan. 12

Management's Expected Action: Point.360 has a remedy period of 180 calendar days in which to regain compliance with the bid price rule. In outlining possible scenarios, Point.360 noted that a reverse stock split is a possibility to regain compliance and avoid delisting.


CleanTech Innovations ( CTEK)

Company Profile: CleanTech Innovations manufactures and designs wind turbine, bellows expansion joints, pressure vessels, and fabricated metal specialty products.

Current Share Price: $4.79 (Feb. 7)

Listing Violation: Public interest concern. The Nasdaq asserts that CleanTech intentionally failed to adhere to obligations to timely disclose material information regarding the company's December 2010 financing during the listing application process. CleanTech was approved for listing on the Nasdaq Capital Market on Dec. 10, and on Dec. 13 the company entered into a $20 million debt and equity bridge financing through a private placement. On Dec. 16, the company announced the financing transactions in a filing with the SEC as it simultaneously filed a registration statement registering the shares issued in the financing.

Received Nasdaq Notice: Jan. 13

Management's Expected Action: "We intend to vigorously appeal the Staff's decision to an independent Nasdaq Hearings Panel," the company said in a regulatory filing. "However, there can be no assurance that our appeal for continued listing will be successful." CleanTech expects to appear before the Nasdaq panel within 45 days of the Jan. 20 filing.

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TeamStaff ( TSTF)

Company Profile: TeamStaff provides staffing services to the U.S. Department of Veterans Affairs and other U.S. governmental entities.

Current Share Price: 40 cents (Feb. 7)

Listing Violation: Delinquency. The Nasdaq says TeamStaff didn't timely file its annual report for the fiscal year ended Sept. 30 with the SEC. In addition, TeamStaff has been in violation of the Nasdaq's bid price rule since June.

Received Nasdaq Notice: Jan. 14

Management's Expected Action: TeamStaff has until March 15 to submit to Nasdaq a plan to regain compliance with the listing rule. If the plan is accepted, TeamStaff would be granted an exception of up to 180 calendar days from the filing's due date, or until July 12. TeamStaff said it "is working diligently on this matter and intends to file its Annual Report on Form 10-K as soon as practicable."


Aehr Test Systems ( AEHR)

Company Profile: Aehr Test Systems makes wafer-contact systems designed to reduce the cost of testing flash, dynamic random access memory, and other memory devices.

Current Share Price: $1.64 (Feb. 7)

Listing Violation: Minimum stockholders' equity. The Nasdaq Global Market requires a minimum stockholders' equity of $10 million for continued listing.

Received Nasdaq Notice: Jan. 18

Management's Expected Action: Aehr Test Systems says it plans to submit its plan to regain compliance with the listing requirement on or before March 4.

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GlobalOptions Group ( GLOI)

Company Profile: GlobalOptions provides risk mitigation and management services to government entities, Fortune 1,000 corporations, and wealthy people.

Current Share Price: $2.44 (Feb. 7)

Listing Violation: Public interest concern. The Nasdaq contends that GlobalOptions is a public shell with no operating business following the sale of the company's Forensic DNA Solutions and Products business and the discontinuation of its International Strategies business, in addition to the prior sales of its other business units.

Received Nasdaq Notice: Jan. 18

Management's Expected Action: The company appealed the Nasdaq's determination, which would have suspended trading in the company's common stock as of Jan. 27. GlobalOptions note that if the company's stock is delisted by Nasdaq, "it would be the company's intention that its securities would be eligible for quotation on the OTC Bulletin Board."


Seven Arts Pictures ( SAPX)

Company Profile: Seven Arts Pictures develops motion pictures worldwide.

Current Share Price: 71 cents (Feb. 7)

Listing Violation: Delinquency. Seven Arts was late in filing its annual report with the SEC for the fiscal year ended June 30. Seven Arts is also in violation of the Nasdaq's bid price rule, as the stock last closed above $1 for the 10 consecutive trading sessions ended Sept. 2.

Received Nasdaq Notice: Jan. 19

Management's Expected Action: Seven Arts said on Jan. 25 that it intends to file its annual report within five business days. Seven Arts now has 60 calendar days to submit a plan to regain compliance with Nasdaq listing rules.

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Cybex International ( CYBI)

Company Profile: Cybex makes strength and cardiovascular fitness equipment for the commercial and consumer markets.

Current Share Price: 72 cents (Feb. 7)

Listing Violation: Bid price. The listing rule requires that a company maintains a minimum closing bid price of $1 per share for its common stock. Cybex International shares last closed above $1 on Dec. 7.

Received Nasdaq Notice: Jan. 21

Management's Expected Action: Cybex has until July 20 to regain compliance with the minimum bid price continued listing requirement, and the company has indicated it may apply for an extension of the compliance period or an appeal to a Nasdaq Listing Qualifications Panel as it considers options to regain compliance.


OceanFreight ( OCNF)

Company Profile: OceanFreight provides shipping services, specializing in transporting dry-bulk cargo, which include iron ore, coal and grain, as well as crude oil.

Current Share Price: 82 cents (Feb. 7)

Listing Violation: Bid price. The listing rule requires that a company maintains a minimum closing bid price of $1 per share for its common stock. OceanFreight shares last closed above $1 on Dec. 9.

Received Nasdaq Notice: Jan. 25

Management's Expected Action: OceanFrieght said it intends to monitor the closing bid price of its common stock between now and July 25 and "is considering its options in order to regain compliance with the Nasdaq minimum bid price requirement."

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Seanergy Maritime Holdings ( SHIP)

Company Profile: Seanergy Maritime transports dry-bulk cargo through the ownership and operation of dry-bulk carriers.

Current Share Price: 83 cents (Feb. 7)

Listing Violation: Bid price. The listing rule requires that a company maintains a minimum closing bid price of $1 per share for its common stock. Seanergy Maritime shares last closed above $1 on Dec. 20.

Received Nasdaq Notice: Jan. 28

Management's Expected Action: Seanergy Maritime said it intends to monitor the closing bid price of its common stock between now and July 27 and "is considering its options in order to regain compliance with the Nasdaq Global Market minimum bid price requirement."


eDiets.com ( DIET)

Company Profile: eDiets.com develops and markets Internet-based diet and fitness programs.

Current Share Price: 39 cents (Feb. 9)

Listing Violation: Market value, equity and net income. eDiets.com does not comply with the minimum $35 million market value of listed securities requirement for continued listing on the Nasdaq. In June, eDiets.com was also slapped with a delisting warning from the Nasdaq due to a violation of the minimum bid price requirement.

Received Nasdaq Notice: Jan. 31

Management's Expected Action: eDiets.com has until Aug. 1 to regain compliance with the market value requirement. Meanwhile, eDiets.com says that it expects to hear from a Nasdaq hearing panel regarding the pending delisting of its stock as it has not yet regained compliance with the minimum bid price requirement. On Feb. 4, the company said it expects the panel's decision within the next 30 to 45 days.

-- Written by Robert Holmes in Boston.

>To contact the writer of this article, click here: Robert Holmes.

>To follow Robert Holmes on Twitter, go to http://twitter.com/RobTheStreet.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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