Nasdaq Delists Pen Interconnect

After a recent flurry of new contract announcements, Irvine-based Pen Interconnect Inc. said last week that it had been delisted by the Nasdaq exchange because the company could not meet the organization’s criteria for net tangible assets.

Last year, Nasdaq raised its requirements to get on and stay on its market, leading to a flurry of delistings. In 1998, 591 companies fell off the market for regulatory reasons--as opposed to bankruptcies, mergers or takeovers. That was more than double the 1997 total of 290.

The new requirements, which kicked in last February, include a minimum stock bid price of $1, net assets of at least $2 million and market value of $1 million.

Falling off the market means reduced visibility for a company wanting to attract investors. In most cases, as is true with Pen, a delisted company’s stock then must trade over the counter, an area unattractive to many investors.

Pen said Nasdaq believed the company could not continue to comply with the requirement for net tangible assets. Pen, which has recently undergone a major restructuring, disagreed: It believes it does comply with the requirements and will continue to do so.

Unfortunately, to be reinstated, the company will have to meet even tougher requirements, said Mike Shokouhi, a market spokesman.

Initial listing requirements include net tangible assets of $4 million and a minimum bid price of $4 per share. Pen’s delisting came after the company announced a series of new contracts totaling $19 million, including a $10-million manufacturing agreement with Imaging Technologies Corp.

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Jonathan Gaw covers technology and electronic commerce for The Times. He can be reached at (714) 966-7818 and at jonathan.gaw@latimes.com.