Paragon Shipping announced that on May 24, 2016, the company received a notice of default from Yangzhou Dayang Shipbuilding Co. Ltd., for not taking delivery of the Ultramax newbuilding drybulk carrier with Hull number DY4050.
Furthermore, Paragon Shipping announced that it has received written notification from The NASDAQ Stock Market (“NASDAQ”) dated May 19, 2016, indicating that because the Company’s stockholders’ equity as of December 31, 2015 was below $2,500,000, the Company no longer meets the minimum stockholders’ equity requirement for The NASDAQ Capital Market, set forth in NASDAQ Listing Rule 5550(b)(1). Pursuant to the NASDAQ Listing Rules, the Company has 45 calendar days to submit a plan to regain compliance. If the plan is accepted, NASDAQ can grant an extension of up to 180 calendar days from the date of the notification letter to evidence compliance.
The Company has voluntarily determined to move the listing of its common stock from The NASDAQ Capital Market to the OTC Markets’ OTCQB Venture Market. The Company anticipates that trading of the Company’s common stock under the ticker symbol “PRGNF” is expected to commence June 6, 2016. In addition, the Company anticipates that its Senior Unsecured Notes will also be moved to the OTC Markets.
The Board of Directors’ voluntary decision to move the Company’s listing from NASDAQ to OTCQB was made following the detailed review of numerous factors including the significant compliance obligations and restrictions that result from the maintenance of a NASDAQ listing, including the associated out-of-pocket costs (compared to the OTCQB) and the Board’s determination that the Company is unlikely to regain compliance with the minimum stockholders’ equity requirement within the time frames required by NASDAQ. Based on the foregoing factors, the Board of Directors does not believe there is continuing shareholder value in attempting to maintain the Company’s listing on NASDAQ at this time. The Company will continue to file periodic and other reports with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, and other federal securities laws.