Brentwood, TN-based Diversicare Healthcare Services has been given until June 17 to regain compliance with a Nasdaq Stock Market requirement or face potential delisting.
The company would be able to appeal the delisting determination, if issued.
Diversicare made the disclosure in a Dec. 21 filing with the Securities and Exchange Commission, citing the Dec. 19 receipt of a letter from Nasdaq that it had not met the stock exchange’s market value of listed securities, or MVLS, requirement of $35 million. To regain compliance with the MVLS requirement, Diversicare must maintain an MVLS of at least $35 million for at least 10 consecutive business days during a 180-day period.
“The company actively monitors the price of the common stock and will consider all available options to regain compliance with the continued listing standards,” Diversicare said in its filing with the SEC. The MVLS notice does not have any immediate effect on the company’s listing on Nasdaq or on the trading of the common stock, Diversicare said.
As of Sept. 30, Diversicare operates facilities with a total of 8,456 licensed nursing beds and 497 licensed assisted and residential living beds, according to a previous SEC filing.
The company reported a net loss from continuing operations of $7.4 million, or $1.15 per share, in the third quarter of 2018, which it attributed mainly to a litigation contingency expense of $6.4 million related to an ongoing Department of Justice investigation into potential violations of the False Claims Act dating back as far as 2010.
“The company denies any wrong doings and will vigorously defend its actions in the event a settlement is not reached,” Diversicare CEO Jay McKnight said in a statement issued in conjunction with the company’s third-quarter earnings results. The company cannot predict the length of time necessary to conclude the matter, nor can it estimate total losses that may occur, he said at the time.