Towerstream directors approve reverse split to boost stock value, Nasdaq still needs to clear proposal

TOWERSTREAM CORP.'s board of directors on Monday announced it has approved a one-for-seven reverse split of Towerstream common stock.
TOWERSTREAM CORP.'s board of directors on Monday announced it has approved a one-for-seven reverse split of Towerstream common stock.

MIDDLETOWN – Towerstream Corp., a publicly traded telecommunication company, is at risk of becoming delisted from Nasdaq, as it struggles to maintain qualifying levels of equity and per share value.
The company’s board of directors on Monday announced it has approved a one-for-seven reverse split of Towerstream common stock, meaning it will be dividing its total number of shares by seven in an attempt to increase the par value.
Nasdaq in November notified the company that it no longer met the minimum requirement of maintaining a closing bid price of $1 per share for 30 consecutive days. The company continues to fall below the minimum requirement and closed Monday trading at 25 cents per share.
On May 17, the company received a letter from Nasdaq saying its stockholders’ equity during the first quarter of 2016 fell below the minimum requirement of $2.5 million, according to a federal filing. Towerstream’s board of directors is hoping the reverse split could resolve these issues.
“The purpose of the reverse split is to seek to regain compliance with the minimum price rule required by Nasdaq,” according to the company.
Towerstream has until July 1 to regain compliance, which largely hangs on whether Nasdaq approves its reverse-split strategy. But even then, the company may not be able to meet the minimum requirements.
“There can be no assurance the reverse split will be sufficient for the company to regain compliance with the listing requirements to maintain its listing on Nasdaq,” according to Towerstream.
The company opened Tuesday trading at 25 cents per share and has a 52-week high of $2.20 per share recorded last year on June 3. The company’s 52-week low fell to 10 cents per share on March 30 and its 50-day moving average is 20 cents per share.
If Nasdaq rejects the company’s plan, Towerstream expects to receive notice that its securities will be delisted, but it could appeal the decision.

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