4Kids Entertainment has been notified by NYSE Regulation that it is back in compliance with the revised continued listing standards of the New York Stock Exchange.
The NYSE received approval from the Securities and Exchange Commission for a pilot program effective retroactively to May 12th 2009, to amend its listing criteria through October 31st 2009.
The NYSE anticipates making a subsequent rule filing prior to this date to make the revised listing standards permanent.
Under the revised listing standards, a NYSE listed company that originally qualified to list under the 'earnings test' such as 4Kids will be considered to be not in compliance with the NYSE's continued listing standards if its average global market capitalisation over a consecutive 30-day trading period is less than $50 million and, at the same time, its stockholders' equity is less than $50 million.
Prior to the amendment, these market capitalisation and stockholders' equity thresholds had each been $75 million.
4Kids announced back in April that it was not in compliance with the NYSE's continued listing standards as a result of its stockholders' equity at the end of the first quarter 2009 being equal to $74.99 million, $10,000 below the minimum NYSE requirement at that time.
The NYSE has informed 4Kids that if it does not meet the continued listing standards within 12 months of the date it was deemed to be in compliance, it would receive formal notification from NYSE Regulation. The staff would then examine the relationship between the two incidents of falling below the continued listing standards and re-evaluate 4Kids' method of financial recovery from the first incident.
Actions following on from this could include initiating suspension and delisting procedures.