Nestor faces de-listing by Nasdaq

PROVIDENCE – Nestor Inc. (Nasdaq: NEST) was notified by the Nasdaq Stock Market LLC, in a letter dated Tuesday, that the market intends to end trading in the company’s stock at the end of this month and de-list the securities. Nestor said it “does not expect that it will appeal the staff’s delisting determination.”
A year ago today, the traffic-safety systems and services provider was notified that – because its stock had traded below $1 per share for the previous 30 business days – it was no longer in compliance with requirements for continued listing on Nasdaq. In accordance with marketplace rules, Nestor was given 180 days to meet the market’s minimum bid price requirement or risk delisting. (READ MORE)
Nestor was unable to regain compliance by the Oct. 22 deadline. But, because the company was able to demonstrate compliance with all other initial listing requirements, it was given another 180 days to meet market standards. (READ MORE) That period expired on Monday.
Should Nestor choose to appeal the de-listing, it must do so by April 29, and must provide a plan for regaining compliance, the Nasdaq staff determination letter indicated. Historically, Nasdaq review panels have generally viewed a reverse stock split in 30 to 60 days as the only definitive plan acceptable to resolve a bid price deficiency.
Otherwise, trading in Nestor shares will be suspended at the opening of business on May 1, and The Nasdaq Stock Market will then file a de-listing request (Form 25-NSE) with the U.S. Securities and Exchange Commission.
Rather than appealing the Nasdaq decision, however, Nestor said it intends to seek listing on the Over-the-Counter Bulletin Board (OTC-BB).
The de-listing of its common stock would put Nestor in violation of the terms of its senior debt, except that the holders of that debt have agreed to waive such “events of default” through June 30. And in light of that temporary waiver, Nestor has decided to focus “on consummating a transaction … which will permit the company to continue its operations in a positive manner,” the company said.
“Although we are disappointed that the market has not yet recognized the dramatic advances the company has made,” Nestor CEO Clarence A. Davis said in a statement last night, “we remain confident in the company’s future and look forward to finalizing a transaction with our Senior Note Holders that will give the company the runway it needs to succeed in the marketplace.”
Nestor’s substantial net losses in recent years raise questions about the company’s viability, auditors noted in its 2007 annual report. But, Davis said, “we are delivering some of the finest service and best conviction rates in the industry and will continue to grow our operations through strategic sales initiatives.”
In a separate announcement today, Nestor said the City of San Bernardino, Calif., has agreed to more than triple its automated red-light enforcement contract with the company, to 29 approaches from the current eight. “This is an example of the confidence our customers have in the effectiveness of our safety programs and our patented Collision Avoidance technology,” Davis said. “In fact, we are presently working with several other municipalities to expand their programs as well.”
Nestor Inc. (Nasdaq: NEST), the parent of Nestor Traffic Systems, is a provider of video-, photo- and LiDAR-based traffic-enforcement systems and services to state and municipal governments. For more information, visit www.nestor.com.