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As expected, TranSwitch Corp. of Shelton, Conn., received notice from Nasdaq that it is not in compliance with a rule required to stay on the market, and faces delisting. The company’s stock has been unable to meet the minimum $1 per share for more than 30 consecutive business days.
Last week, TranSwitch (Nasdaq: TXCC) announced it had plans to meet that requirement by engaging in a one-for-eight reverse stock split that will result in reducing TranSwitch’s common stock outstanding from approximately 160 million shares to approximately 20 million shares. The reverse split, however, won’t happen until Nov. 23, 2009.
If TranSwitch chose not appeal the delisting decision, the stock would be removed from trading on the Nasdaq exchange on Nov. 16, one week before the reverse split is scheduled to occur. TranSwitch officials say the company has appealed the decision, but there is no guarantee that the Nasdaq Hearings Panel will take the hearing, which would stay the delisting.
In December of 2008, TranSwitch purchased $15 million worth of its $25 million in outstanding convertible notes, issued in July of 2007. The firm paid $9.9 million, plus accrued interest, for the notes. For 2008, TranSwitch lost $17 million on revenue of $42 million.
TranSwitch makes semiconductors and technologies for voice, data and video communications network equipment for the telecom, datacom, cable television and wireless markets.
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