Cosi Inc. (COSI), a premium convenience restaurant company, received a notice from the Listing Qualifications Department of the Nasdaq Stock Market. The notice states that, for the last 30 consecutive business days, the bid price for the company’s common stock has closed below the minimum $1.00 per share requirement for the continued inclusion on the Nasdaq Global Market, under Nasdaq Listing Rule 5450(a)(1).
The notice letter also states that the company will be provided 180 calendar days, or until Mar 15, 2010, to regain compliance with respect to the minimum bid price requirement. To regain compliance, shares of the company must maintain a minimum closing price of at least $1.00 per share for a minimum of ten consecutive business days. However, Cosi’s common stock will continue to trade on the Nasdaq Global Market under the symbol ‘COSI’.
Should the company fail to regain compliance by Mar 15, 2010, Nasdaq will then provide a notice to Cosi that its common stock will be delisted. However, the company may be eligible for an additional grace period if it satisfies all the requirements, other than the minimum bid price requirement, for initial listing on the Nasdaq Capital Market, set forth in Nasdaq Listing Rule 5505. In order to take advantage of this alternative, the company will need to submit an application to transfer its securities to the Nasdaq Capital Market.
Therefore, the company plans to actively monitor the bid price for its shares between now and Mar 15, 2010, and is ready to consider all available options to resolve the deficiency and regain compliance with the Nasdaq minimum bid price requirement.
The global recession has severely affected the company’s business, especially the catering services. Furthermore, the company posted dismal second-quarter results with a net loss of 2 cents per share and a revenue decline of 13.9% year over year. In addition, traffic also fell 9.8%, while the average check declined 2.9%.
Also, company-owned net restaurant sales fell 14.3% in the quarter, due to a 12.7% drop in comparable-restaurant sales and the closing of 5 locations since the end of the second quarter of 2008.
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