NASDAQ Warns Cumulus Of Delisting Possibility Again... But Company Offers An Explanation

Market Trouble Again?

CUMULUS MEDIA has once again been notified by NASDAQ that it faces delisting because its stockholders' equity has dropped below the market's standards.  However, the company says that the reasons for the non-compliance were one-time non-cash impairment charges and that it would otherwise have been in compliance.

The company informed the FCC in a Form 8-K filing MONDAY (3/28) that NASDAQ sent it a notification on MARCH 21st that indicated CUMULUS, based on year-end 2016 numbers, is not in compliance with the NASDAQ rules for trading based upon the stockholders’ equity continued listing standard. NASDAQ's minimum stockholders' equity is $2.5 million; the company also failed to meet the alternative continued listing standards of either at least $35 million in  market value of listed securities or at least $500,000 net income for the most recently completed fiscal year, or two of the three most recently completed fiscal years.

CUMULUS says that the reason for the decline in its stockholders’ equity and net income from continuing operations resulted from one-time non-cash impairment charges, primarily related to goodwill, of $605 million in 2016 and $584.9 million in 2015.  The company has until MAY 5th to submit a plan to regain compliance with NASDAQ rules and can also get an extension of up to 180 calendar days from the date of the notification letter to show compliance with the Rule.

CUMULUS shareholders approved a 1-for-8 reverse stock split in OCTOBER to regain compliance with NASDAQ minimum share price requirements.  The stock has since dropped well below $1 per share.

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