South Texas Oil Co announced that on May 20, 2009 it received a Nasdaq Staff Deficiency Letter pertaining to continuing listing requirements for the Nasdaq Global Market. Included below is the disclosure included in the Company's filing on Form 8-K which was filed with the Securities and Exchange Commission on May 22, 2009.
On May 20, 2009, South Texas Oil Company received a Nasdaq Staff Deficiency Letter from Nasdaq's Listing Qualifications Department indicating that the Company is not in compliance with the minimum $10,000,000 stockholders' equity requirement for continued listing on the Nasdaq Global Market, as required by Marketplace Rule 5450(b)(1)(A). The Nasdaq notice was the result of its review of the Company's recent filing on Form 10-Q for the period ending March 31, 2009, which reported total stockholders' equity of $8,974,415.
Under Nasdaq Rules, the Company has 15 calendar days from the receipt of the Letter to submit a plan to regain compliance with Nasdaq Global Select continued listing requirements. The Company will submit its plan by June 4, 2009 based, in part, upon the closing of the Company's $27.3 million debt restructuring transactions, which closed effective May 18, 2009. If the plan is accepted by Nasdaq, the Company can be granted an exception of up to 105 calendar days from the issuance of the initial Staff Deficiency Letter to become compliant. If Nasdaq determines the plan is not sufficient to achieve and sustain compliance, the Company will receive notice of delisting, and the Company will either engage in an appeal processes or consider applying for listing on the Nasdaq Capital Market, the continued listing qualifications of which are currently met by the Company. In determining whether to accept the plan, Nasdaq will consider other criteria concerning (i) the likelihood that the plan will result in compliance with Nasdaq's continued listing criteria on a continuing basis, (ii) the Company's past compliance history, (iii) the reasons for the current non-compliance, and (iv) other relevant corporate events that may occur within the review period.
The Company believes that the closing of the debt restructuring transactions, effective as of May 18, 2009, will cause the Company's stockholders' equity to be restored to a compliant level. As disclosed in the Company's April 24, 2009 filing with the Securities and Exchange Commission in the Company's Definitive Schedule 14C, relative to the purpose of the debt restructuring:
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