Zoo Entertainment is under threat of being delisted from Nasdaq.
According to a report on the Cincinnati Business Courier, the independent games publisher has been informed that it doesn't meet the Nasdaq Capital Market's standards.
The main point of contention is Zoo's stockholder deficit of $5.2 million, as the Nasdaq requires listed companies to have at least $2.5 million in stockholder equity.
Zoo held $4.2 million in stockholder equity at the end of the first quarter of this year, but the company's difficult transition from physical to digital distribution led to a loss of $10.1 million in the second quarter.
Nasdaq has given Zoo Entertainment 45 days to produce a strategy for meeting the exchange's requirements, and, if it is accepted, a further six months to execute.
"We are preparing a plan to regain compliance to submit to Nasdaq," the company said in an SEC filing. "There is no assurance that the plan will be accepted or that our stock will not be delisted."
Last month, Zoo's stockholders filed a class action lawsuit against the company, alleging that it made "materially false and misleading statements" regarding its financial records in 2010.