Company stung by stockholder deficit of $5.2m
Zoo Entertainment, the indie and mobile games publisher, has 45 days to prevent being delisted from the Nasdaq stock exchange.
The stock exchange has notified Zoo that it no longer meets qualifications for listing. Nasdaq-listed firms require a minimum of $2.5 million in stockholder equity. In its most recent financial report, Zoo said it was operating with a stockholders' deficit of $5.2 million.
According to the Cincinnati Business Courier, Zoo now has 45 days to issue a business plan which details how the company will return to compliance. If the Nasdaq Capital Market accepts the plan, Zoo will have just six months to reach its target.
"We are preparing a plan to regain compliance to submit to Nasdaq," Zoo Entertainment said.
"There is no assurance that the plan will be accepted or that our stock will not be delisted."
Last week the Ohio based Zoo notified investors of a 63 per cent year-on-year revenue decrease. CEO Mark Seremet said the company’s transition to becoming a digital-only publisher has been "rough",
“We remain very optimistic about our future and are ready to fully expand our new digital business," he added.
The company is currently embroiled in a class-action lawsuit for allegedly misleading investors with inaccurate income and earnings statements.
Zoo Entertainment's stock continues to be listed on Nasdaq.
Zoo Publishing is the sponsor of indiePub Games, a community of independent video game developers. The company holds developer competitions with cash prizes and publishing deals on offer.
In February, the company announced a mobile edition of its indiePub competition. EA Mobile's former development director Rob Cassidy has been appointed as director of the contest.