Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On June 20, 2014, Crumbs Bake Shop, Inc. (the "Company") received a letter from the Listing Qualifications Department of The NASDAQ Stock Market ("Nasdaq") notifying the Company that it has determined to deny the Company's request for continued listing of the Company's common stock on The Nasdaq Capital Market. Nasdaq indicated that it will suspend the trading of the common stock effective at the opening of business on July 1, 2014 and, in connection therewith, will file a Form 25-NSE with the Securities and Exchange Commission, which will remove the common stock from listing and registration on Nasdaq. Nasdaq's determination was based on the Company's failure to comply with the minimum $2,500,000 stockholders' equity requirement for continued listing set forth in Nasdaq Listing Rule 5550(b), coupled with the fact that the Company did not meet at least one of the following alternative minimum listing requirements: (i) the market value of its listed equity securities must be at least $35 million; or (ii) it must have recorded net income from continuing operations of at least $500,000 in the most recently completed fiscal year or in two of the three most recently completed fiscal years. Nasdaq's determination followed its initial letter of non-compliance received on April 9, 2014 and the Company's submission of a plan outlining the efforts it was undertaking to regain compliance with the continued listing standards in response thereto. The Company has the right to appeal Nasdaq's determination to a Hearings Panel pursuant to the procedures set forth in the 5800 Series of the Listing Rules. A hearing request will stay the trading suspension and the filing of the Form 25-NSE pending the Hearings Panel's decision.
If the Company's common stock is delisted from The Nasdaq Capital Market, the Company may seek to have the common stock quoted on the Over-the-Counter Bulletin Board (the "OTCBB"). It should be noted, however, that the OTCBB is not an issuer listing service or securities market, but a quotation service for market makers registered with the Financial Industry Regulatory Authority. An issuer of securities cannot submit a quotation application directly with the OTCBB. Rather, to be quoted, at least one market maker must sponsor the security and demonstrate compliance with Rule 15c2-11 under the Securities Exchange Act of 1934, as amended. In addition, the Company must meet certain eligibility requirements before its common stock may be quoted. Accordingly, no assurance can be given that the Company's common stock will be quoted on the OTCBB if it is suspended from trading on The Nasdaq Capital Market.
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