TRANS WORLD ENTERTAINMENT CORPORATION (NASDAQ:TWMC) Files An 8-K Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On July 16, 2019, Trans World Entertainment Corporation (the “Company”) received approval from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) to transfer the listing of the Company’s common stock from the Nasdaq Global Market to the Nasdaq Capital Market (the “Approval”).
As previously disclosed, on January 15, 2019, the Company received written notice from Nasdaq that the closing bid price for its common stock had been below $1.00 for the previous 30 consecutive business days, and that the Company therefore is not in compliance with the minimum bid price requirement for continued inclusion on The Nasdaq Global Market under Nasdaq Listing Rule 5450(a)(1). The Company had a period of 180 calendar days, or until July 15, 2019, to regain compliance. In response, on July 2, 2019, the Company filed an application to transfer the listing of its common stock from the Nasdaq Global Market to the Nasdaq Capital Market.
As a result of the Approval, the Company has been granted an additional 180-day grace period, until January 13, 2020, to regain compliance with the Nasdaq rule’s $1.00 minimum bid requirement. The Company’s common stock will be transferred to the Nasdaq Capital Market effective as of the open of business on July 18, 2019, and will continue to trade under the symbol “TWMC.” The Nasdaq Capital Market operates in substantially the same manner as the Nasdaq Global Market and listed companies must meet certain financial requirements and comply with Nasdaq’s corporate governance requirements.
The notification indicated that the Company is eligible for the additional grace period, in part, because it provided written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, as more fully described in Items 3.03 and 5.03 of this Current Report on Form 8-K.
Item 3.03 Material Modification of Rights of Security Holders.
Effective August 15, 2019 at 4:00 p.m. Eastern Standard Time (the “Effective Time”), the Company will effect a twenty-for-one reverse stock split of its outstanding common stock (the “Reverse Stock Split”).
The authority to implement a Reverse Stock Split was approved by the Company’s shareholders at the Annual Meeting of Shareholders held on June 27, 2019, and the Company’s Board of Directors subsequently adopted the Reverse Stock Split. Upon the effectiveness of the Reverse Stock Split, every twenty shares of issued and outstanding common stock before the open of business on August 16, 2019 will be combined into one issued and outstanding share of common stock, with no change in par value per share. No fractional shares will be issued as a result of the Reverse Stock Split. All fractional shares created by the Reverse Stock Split will be rounded up to the nearest whole share. In addition, proportionate adjustments will be made to the exercise prices of the Company’s outstanding restricted stock units and stock options and to the number of shares issued and issuable under the Company’s 2005 Long Term Incentive and Share Award Plan (as amended and restated on April 5, 2017). The Company’s common stock will open for trading on Nasdaq on August 16, 2019 on a post-split basis under the new CUSIP number: 89336Q209.
The Reverse Stock Split is primarily intended to bring the Company into compliance with the minimum average closing share price requirement for maintaining its listing on the Nasdaq Capital Market. The Company’s common stock will continue to trade under the symbol “TWMC”.
The Reverse Stock Split will reduce the number of shares of the Company’s outstanding common stock from approximately 36,258,839 million shares to approximately 1,812,941 million shares.
Shareholders holding share certificates will receive information from Computershare, the Company’s transfer agent, regarding the process for exchanging their shares of common stock. Shareholders with questions may contact our transfer agent by calling 800-546-5141.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On July 16, 2019, the Company filed a Certificate of Amendment (the “Certificate of Amendment”) to the Company’s Certificate of Incorporation (as amended, the “Certificate of Incorporation”) with the Secretary of State of the State of New York to effect the Reverse Stock Split at the Effective Time.
The information set forth in Item 3.03 of this Current Report on Form 8-K is incorporated by reference into this Item 5.03. A copy of the Certificate of Amendment to the Company’s Certificate of Incorporation is filed as Exhibit 3.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
The following exhibit is filed herewith:
| Exhibit No. | Description |
| 3.1 | Certificate of Amendment. |
TRANS WORLD ENTERTAINMENT CORP Exhibit
EX-3.1 2 c93980_ex3-1.htm Exhibit 3.1 CERTIFICATE OF AMENDMENT OF THE CERTIFICATE OF INCORPORATION OF Trans World Entertainment Corporation Under Section 805 of the Business Corporation Law FIRST: The name of the corporation is Trans World Entertainment Corporation (the “Corporation”). The name under which it was originally formed is: Trans-World Music Corp. SECOND: The certificate of incorporation of the Corporation (such certificate of incorporation,…
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About TRANS WORLD ENTERTAINMENT CORPORATION (NASDAQ:TWMC)
Trans World Entertainment Corporation is a specialty retailer of entertainment products, including trend, video, music, electronics and related products. The Company operates a chain of retail entertainment stores and e-commerce sites, www.fye.com and www.secondspin.com. It owns interest in Record Town, Inc., through which its principal operations are conducted. It operates over 270 mall-based stores under the For Your Entertainment (f.y.e.) brand, including f.y.e. stores and video only stores. The Company operates over 260 mall-based f.y.e. stores, which carry entertainment products, including video, music, trend, electronics, video games and related products. It operates over nine video-only stores under the Suncoast Motion Pictures brand, which specialize in the sale of video and related product. It operates approximately 30 freestanding stores under the f.y.e. brand, which carries entertainment products, including video, music, trend, electronics, video games and related products.