Overland to be De-registered from Nasdaq?

By Greg McNevin

October 8, 2008: It’s no secret that after several years of net losses when it comes to earnings, Overland Storage has been struggling a bit of late. However, the company’s profile has now sunk so low that it is in danger of being de-registered from Nasdaq.

The storage firm has been struggling since 2006, when previous CEO Chris Calisi presided over thoroughly disappointing period that saw the company post net losses of US$44.1 (AU$61.5) million loss on revenues of US$160.4 (AU$223.7) million in 2007, and a US$24.6 (AU$34.3) million on revenues of US$127.7 (AU$178.1) million for fiscal year 2008.

Nasdaq notified Overland on October first that its stock price had spent 30 consecutive business days below the minimum US$1.00 (AU$1.39) per share, and that the Company has 180 calendar days, or until March 30, 2009, to regain compliance.

To escape de-registration, the bid price of Overland's common stock must close at US$1.00 per share or more for a minimum of 10 consecutive business days.

With the global market turmoil and a share price that has been hovering around US$0.41 (AU$0.57) per share, Overland has little chance to trade it’s way out of trouble, so its board is proposing that a reverse stock split of its common stock, reducing the number of shares but increasing their value to above the threshold.

However, there is no assurance that the shareholders will approve the proposal, or that if they do, that the reverse stock split will succeed in achieving and maintaining the required minimum bid price. The vote is to take place on December 9, but even if approved, there are still question marks over Overland’s ability to continue to meet other important Nasdaq listing requirements.

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