26 Small-Cap Stocks in Danger of Delisting

BOSTON ( TheStreet) -- Small-cap stocks, measured by the Russell 2000 Index, were little changed in April, trailing the broader market during a busy month of earnings releases from companies ranging from Apple ( AAPL) to Ford ( F) to Citigroup ( C).

The underperformance of small-cap stocks is worrisome, given they inherently carry higher risks than their larger peers do. One of those is the inability to remain compliant with listing standards of the Nasdaq, spurring delisting warnings from the exchange.

Overall, April wasn't a banner month for equities, with the S&P 500 and Dow Jones Industrial Average up less than 1.5%. Google ( GOOG), a major constituent of the S&P 500, dropped 11%. Meanwhile, many small-cap stocks, like Fuwei Films ( FFHL), plummeted nearly 50%.

Some smaller companies, which typically expose investors to greater volatility, suffer from deficiencies ranging from violations of the minimum bid-price rule, as share prices of some penny stocks have languished below $1, to violations of board independence, delinquency and market value.

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 break through with surging revenue or profit growth. TeamStaff ( TSTF), slapped with a delisting warning months ago, rallied 38% in April. On the other hand, Integra Bank ( IBNK), also a recipient of a delisting notice a few months ago, tumbled more than 30% this month.

The following 26 companies were notified in April that they're in violation of listing requirements and could be kicked off the Nasdaq. The companies now have a limited window of time to regain compliance with the exchange's listing rules.


First Community Bank Corp. of America ( FCFL)

Company Profile: First Community Bank provides banking services to small- and middle-market businesses and individuals in Florida.

Current Share Price: 28 cents (April 26)

Listing Violation: Market value of publicly held shares. The Nasdaq requires that First Community Bank maintain a minimum $1 million market value of publicly held shares for continued listing. In March, First Community Bank also received a delisting notice from the Nasdaq as the company's stock is below the minimum bid price requirement.

Received Nasdaq Notice: April 1

Management's Expected Action: First Community Bank has until Sept. 28 to regain compliance with this listing standard. The company noted that Community Bank, also based in Florida, offered to buy First Community Bank in February for $10 million. The deal is expected to close in May. If the deal does not close, First Community Bank said it will take any action relating to either of the foregoing matters.

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GrayMark Healthcare ( GRMH)

Company Profile: GrayMark Healthcare provides diagnostic sleep-testing services and care-management services for people with chronic sleep disorders.

Current Share Price: 48 cents (April 26)

Listing Violation: Market value/equity/net income. Stockholders' equity was less than $2.5 million as of Dec. 31, and the company doesn't meet the alternative standards of market value of listed securities or net income from continuing operations. In February, GrayMark was hit with a delisting notice for failure to meet the minimum bid price requirement.

Received Nasdaq Notice: April 1

Management's Expected Action: GrayMark has until May 16 to submit a plan to regain compliance with the continued listing standards. If the plan is accepted, Graymark will be granted an extension until Sept. 28 to regain compliance. Graymark said it intends to submit a plan by May 16 but it can give no assurance that its plan will be accepted or, if accepted, the plan will be successfully implemented by the extended deadline.


China MediaExpress Holdings ( CCME)

Company Profile: China MediaExpress operates a television advertising network on inter-city express buses in China.

Current Share Price: $11.88 (trading halted since March 11)

Listing Violation: Public interest concern. The company was also slapped with a delinquent notice in March after it failed to file its annual 10-K report with the SEC in a timely manner.

Received Nasdaq Notice: April 1

Management's Expected Action: The Nasdaq moved to suspend the company's common stock from trading on April 12 on a flurry of news regarding accounting concerns and shareholder lawsuits. China MediaExpress appealed the determination and will go before a hearing panel.

On March 14, China MediaExpress said its audit firm, the Chinese affiliate of Deloitte & Touche, had determined it "was no longer able to rely on the representations of management, and recommended that certain issues encountered during the audit be addressed by an independent investigation." China MediaExpress CFO Jacky Lam also resigned.

The news came weeks after short sellers, who profit from a stock's decline, accused China MediaExpress of fraud. Shares of China MediaExpress, halted since March 11, are down 25% this year.

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Southern Community Financial ( SCMF)

Company Profile: Based in Winston-Salem, N.C., Southern Community Financial offers a full range of financial services to individuals, businesses and nonprofit organizations in the communities it serves.

Current Share Price: $1.30 (April 26)

Listing Violation: Shareholder approval and listing of additional shares. Southern Community adopted its 2007 restricted stock plan without obtaining shareholder approval, according to the Nasdaq's letter. Additionally, the company did not file with Nasdaq a notification for the listing of additional shares at least 15 days prior to establishing the plan.

Received Nasdaq Notice: April 1

Management's Expected Action: Southern Community has 45 days to submit a plan to regain compliance. If the compliance plan is accepted, the company may be granted up to 180 calendar days from the date of the initial notice to show evidence of compliance. Southern Community said it plans to submit the plan for shareholder approval at its annual meeting.


GSI Commerce ( GSIC)

Company Profile: GSI Commerce is a provider of e-commerce and interactive marketing services to businesses that sell products directly to consumers.

Current Share Price: $29.76 (April 26)

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

Received Nasdaq Notice: April 4

Management's Expected Action: GSI Commerce was proactive in alerting the Nasdaq on March 30 that, following the resignation of Mark Menell from the company's board of directors, it was not in compliance with the audit committee composition listing requirement. The company said it intends to fill the vacancy on the audit committee created by Menell's resignation within the cure period provided by the Nasdaq.

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First Security Group ( FSGI)

Company Profile: First Security Group provides banking and financial services to various communities in eastern and middle Tennessee and northern Georgia.

Current Share Price: 86 cents (April 26)

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. First Security shares last closed above $1 on Feb. 17

Received Nasdaq Notice: April 4

Management's Expected Action: First Security said it has until Oct. 3 to regain compliance with the bid price rule. The company said it is currently evaluating its alternatives to resolved compliance with the listing requirement.


HSW International ( HSWI)

Company Profile: HSW International is an online publishing company that develops and operates Internet businesses focused on providing consumers in the world's digital economies with locally relevant, high-quality information and ways to connect with each other.

Current Share Price: $4.44 (April 26)

Listing Violation: Equity. The Nasdaq requires a minimum stockholders' equity of $10 million for continued listing. HSW International's stockholders' equity as of Dec. 31 was $8.78 million.

Received Nasdaq Notice: April 4

Management's Expected Action: HSW International has been given until May 19 to submit a plan to the Nasdaq to regain compliance. If the plan is accepted, Nasdaq can grant an extension until Oct. 3. The company said it expects it will be able to satisfy the requirements, also noting it is eligible to transfer the listing of its common stock to the Nasdaq Capital Market and could do so to maintain continued listing.

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Waccamaw Bankshares ( WBNK)

Company Profile: Waccamaw Bankshares is engaged in attracting deposits from the general public and using such deposit funds to make commercial, consumer, and residential construction and permanent mortgage real estate loans.

Current Share Price: $1.17 (April 26)

Listing Violation: Delinquent. Waccamaw Bankshares failed to file its annual 10-K report with the SEC in a timely manner.

Received Nasdaq Notice: April 4

Management's Expected Action: Waccamaw Bankshares is required to submit a plan to regain compliance by June 3. The Nasdaq can grant the company an extension until Sept. 27 to regain compliance if the plan is approved. If the company is unable to file its annual report prior to June 3, Waccamaw said it intends to submit a plan to regain compliance to the Nasdaq no later than June 3.


InfoSonics ( IFON)

Company Profile: InfoSonics is a distributor and provider of wireless handsets and accessories in Central and South America.

Current Share Price: 81 cents (April 26)

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. InfoSonics shares last closed above $1 on March 18.

Received Nasdaq Notice: April 5

Management's Expected Action: InfoSonics has until Oct. 3 to regain compliance with the bid price requirement. The company said it intends to monitor the bid price of its common stock and will consider available options if the stock does not regain the $1 threshold by Oct. 3.

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Harris Interactive ( HPOL)

Company Profile: Harris Interactive is an international market-research firm widely known for The Harris Poll.

Current Share Price: $1.08 (April 26)

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. Harris Interactive shares have closed above $1 for 13 consecutive days.

Received Nasdaq Notice: April 5

Management's Expected Action: Harris Interactive has until Oct. 3 to regain compliance with the bid price requirement. The company said it intends to monitor the bid price of its common stock and will consider available options if the stock does not regain the $1 threshold by Oct. 3.


PAB Bankshares ( PABK)

Company Profile: PAB Bankshares is a bank holding company for The Park Avenue Bank, which offers traditional banking products and services to commercial and individual customers in Georgia and Florida.

Current Share Price: 18 cents (April 26)

Listing Violation: Delinquent. PAB Bankshares failed to file its annual 10-K report with the SEC in a timely manner.

Received Nasdaq Notice: April 5

Management's Expected Action: PAB Bankshares has until June 6 to submit a plan to regain compliance. The Nasdaq can grant the company an extension until Sept. 27 to regain compliance if the plan is approved.

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Cybex International ( CYBI)

Company Profile: Cybex International is a maker of exercise equipment.

Current Share Price: $1.20 (April 26)

Listing Violation: Equity. The Nasdaq requires a minimum stockholders' equity of $10 million for continued listing. Cybex's stockholders' equity as of Dec. 31 was negative $15 million.

Received Nasdaq Notice: April 5

Management's Expected Action: Cybex has until May 20 to submit a plan to the Nasdaq with steps it will take to regain compliance. The company said it intends to prepare a plan of compliance to submit to the Nasdaq. Cybex also said it is considering options to regain compliance with the Nasdaq's minimum bid price requirement, although the stock has closed above the $1 threshold for seven consecutive trading days.


Superior Bancorp ( SUPR)

Company Profile: Superior Bancorp offers a broad range of banking and related services in approximately 73 locations in Alabama and Florida.

Current Share Price: 28 cents (April 15)

Listing Violation: Delinquent and bankruptcy/liquidation. Superior Bancorp failed to file its annual 10-K report with the SEC in a timely manner.

Received Nasdaq Notice: April 5 and April 18

Management's Expected Action: There's little for Superior Bancorp's management to do now. On April 15, the Office of Thrift Supervision closed the company's subsidiary bank and the Nasdaq delisted the stock.

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Community Central Bank ( CCBD)

Company Profile: Community Central Bank provides various banking services to businesses and consumers in Michigan.

Current Share Price: 17 cents (April 26)

Listing Violation: Delinquent and failure to pay fees. Community Central Bank failed to file its annual 10-K report with the SEC in a timely manner.

Received Nasdaq Notice: April 6 and April 13

Management's Expected Action: The Nasdaq booted Community Central Bank on April 25 after the company elected not to pay its annual listing fee to the Nasdaq. Community Central Bank made the decision as the company felt it could not remedy three listing deficiencies, including delinquency. The company's stock is now quoted on the Pink Sheets.


Pressure BioSciences ( PBIO)

Company Profile: Pressure BioSciences is a life-sciences company.

Current Share Price: $1.06 (April 26)

Listing Violation: Market value/equity/net income. Stockholders' equity was less than $2.5 million as of Dec. 31, and the company doesn't meet the alternative standards of market value of listed securities or net income from continuing operations.

Received Nasdaq Notice: April 6

Management's Expected Action: Pressure BioSciences said it expects to submit to the Nasdaq by May 21 a written plan that outlines its strategy to regain compliance with the continued listing requirements. If the plan is accepted, the company may be able to continue its listing during the Plan period of up to 180 days.

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China Electric Motor ( CELM)

Company Profile: China Electric Motor sells micro motor products used in consumer electronics, cars, power tools, toys and household appliances.

Current Share Price: $2.91 (March 30)

Listing Violation: Delinquent. China Electric Motor failed to file its annual 10-K report with the SEC in a timely manner.

Received Nasdaq Notice: April 6

Management's Expected Action: On March 31, China Electric Motor delayed the filing of its annual report, citing "possible discrepancies concerning the company's banking statements that were very recently identified by the company's auditors."

The company's auditor, MaloneBailey, recently fired more than a third of its Chinese-company clients after allegedly discovering evidence of forged bank documents during the audits of most of those dismissed clients.

China Electric Motor said it had until April 21 to submit a plan to Nasdaq to secure an extension until Sept. 27 to regain compliance. The company said it is working with advisors to resolve issues discovered during the audit. At the same time, China Electric Motor also disclosed that the SEC has initiated a formal, nonpublic investigation into whether the company violated federal securities laws. China Electric Motor said it is committed to cooperating with the SEC.


Celsion ( CLSN)

Company Profile: Celsion is an oncology drug-development company.

Current Share Price: $2.64 (April 26)

Listing Violation: Market value/equity/net income. Celsion does not comply with the minimum $35 million market value of listed securities requirement for continued listing on the Nasdaq.

Received Nasdaq Notice: April 6

Management's Expected Action: Celsion has until Oct. 3 to regain compliance with the listing requirement, which means the company's market value of listed securities must close at $35 million or more for a minimum of 10 consecutive trading days. Celsion said it is evaluating all possible means by which the company may regain sustained compliance with the rule.

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Oxigene ( OXGN)

Company Profile: Oxigene is a clinical-stage biopharmaceutical company that develops therapeutics to treat cancer and eye diseases.

Current Share Price: $2.17 (April 26)

Listing Violation: Audit-committee composition and board independence. The first listing rule requires that a majority of the board of directors must consist of independent directors and that the company's audit committee have at least three members, all of whom must be independent. The other listing rule requires the board of directors to have a majority of members who are independent.

Received Nasdaq Notice: April 6

Management's Expected Action: Oxigene said it intends to comply with Nasdaq's independent director and audit committee requirements within the cure period provided by Nasdaq. The nominating and governance committee of the company's board is currently evaluating potential candidates to fill the vacancy on its board of directors and is assessing the composition of its audit committee.


Sonic Foundry ( SOFO)

Company Profile: Sonic Foundry provides enterprise solutions and services for the web communications market.

Current Share Price: $13.99 (April 26)

Listing Violation: Board independence. The listing rule requires the board of directors to have a majority of members who are independent.

Received Nasdaq Notice: April 7

Management's Expected Action: Sonic Foundry said it expected to receive the notice from the Nasdaq due to the resignation of Gary Weis from the audit committee and his appointment as CEO. By April 20, the company appointed Michael Janowiak to its board of directors to fill Weis' vacancy. With Janowiak serving as an additional independent director, the company said it can regain compliance with the majority independent board requirements.

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Keyuan Petrochemicals ( KEYP)

Company Profile: Keyuan Petrochemicals is a maker of petrochemical products in China.

Current Share Price: $4.88 (trading has been halted since March 31)

Listing Violation: Delinquent. Keyuan Petrochemicals failed to file its annual 10-K report with the SEC in a timely manner.

Received Nasdaq Notice: April 7

Management's Expected Action: Keyuan Petrochemical said it submitted a plan of compliance to the Nasdaq by the April 25 deadline, addressing any issues it believes would support its request for an extension until Sept. 27 to regain compliance.

Keyuan has other issues to deal with more immediately, however. Keyuan requested a trading halt from the Nasdaq after announcing that "the accounting review conducted to date had identified various concerns" with cash transactions and recorded sales that prompted the company's audit committee to undertake an independent investigation. The investigation may lead to restatements of previously issued financial statements, prompting a wave of shareholder lawsuits that allege directors and officers of Keyuan harmed the company by issuing false and misleading statements about the company's financial results.


Vitacost.com ( VITC)

Company Profile: Vitacost.com is an online retailer and direct marketer of health products, including dietary supplements and cosmetics.

Current Share Price: $5.70 (Dec. 7)

Listing Violation: Delinquent. Vitacost.com failed to file its annual 10-K report with the SEC in a timely manner. In January, Vitacost.com was notified by the Nasdaq that it failed to meet listing requirements related to its annual shareholder meeting and proxy solicitation.

Received Nasdaq Notice: April 7

Management's Expected Action: 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. At the time, the Nasdaq suspended trading in the stock.

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China Agritech ( CAGC)

Company Profile: China Agritech sells fertilizer products in China.

Current Share Price: $6.25 (trading has been halted since March 14)

Listing Violation: Public interest concern. In March, China Agritech was hit with a delisting warning after the company to file its annual 10-K report with the SEC in a timely manner.

Received Nasdaq Notice: April 13

Management's Expected Action: China Agritech faces securities fraud class-action lawsuits due to a research report by a short seller. The report alleges that China Agritech inflated its revenue, failed to account for millions of investor dollars and has virtually no product in the market.

In March, China Agritech announced the receipt of the Nasdaq's warning letter not long after the company disclosed in a regulatory filing that it had fired its accounting firm, Ernst & Young Hua Ming.

Following the receipt of the Nasdaq's letter regarding the public interest concern, China Agritech filed an appeal of the determination by requesting an oral hearing before a Nasdaq listing qualifications panel.


Star Buffet ( STRZ)

Company Profile: Star Buffet is a restaurant holding company that operates in the southeastern and western U.S.

Current Share Price: $1.33 (April 26)

Listing Violation: Failure to pay fees. The Nasdaq said the company has a past due listing fee balance of $27,500.

Received Nasdaq Notice: April 13

Management's Expected Action: Star Buffet said on April 15 that it is considering the best alternative uses of its available resources. As of the April 25 deadline, the company's stock was booted from the Nasdaq and now trades on the Pink Sheets.

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Fuwei Films ( FFHL)

Company Profile: Fuwei Films develops plastic film using the biaxial oriented stretch technique, known as BOPET film.

Current Share Price: $2.25 (April 26)

Listing Violation: Public interest concern. The Nasdaq determined that continued listing is no longer warranted and would be inconsistent with the public interest.

Received Nasdaq Notice: April 13

Management's Expected Action: The Nasdaq came to its determination after Fuwei Films disclosed that three executives had been convicted in China on charges that they had illegally taken control of the business. The company said it has appealed the Nasdaq's determination to the Nasdaq Listing Qualifications Panel.


Atrinsic ( ATRN)

Company Profile: Atrinsic is a direct-marketing company offering transactional and subscription services.

Current Share Price: $2.50 (April 26)

Listing Violation: Equity. The Nasdaq requires a minimum stockholders' equity of $10 million for continued listing. Atrinsic's stockholders' equity as of Dec. 31 was $8.17 million.

Received Nasdaq Notice: April 14

Management's Expected Action: Atrinsic has until May 31 to submit a plan to regain compliance to the Nasdaq in order to get an extension of 180 days. Atrinsic says that while it is developing a strategy to maintain its listing on the Nasdaq Global Market, it is considering applying for listing on the Nasdaq Capital Market instead.

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Westway Group ( WWAY)

Company Profile: Westway Group is a provider of liquid animal-feed supplements.

Current Share Price: $4.38 (April 26)

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

Received Nasdaq Notice: April 14

Management's Expected Action: Westway notified the Nasdaq on March 29 of the resignation of Gregory Holt from the company's board of directors. Because of Holt's resignation, Westway does not have a majority of independent directors on its board nor does it have three independent members on its audit committee. Westway says it has been given until Sept. 22 to regain compliance with both requirements.

>>To see these stocks in action, visit the Small-Cap Stocks in Danger of Delisting portfolio on Stockpickr.

-- Written by Robert Holmes in Boston.

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

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