AdStar Fights to Stop Nasdaq Delisting

By: Lucia Moses Facing growing losses, electronic ad-submission service provider AdStar Inc. announced Tuesday it risks possible delisting from Nasdaq after its shareholder equity fell below the minimum listing requirement of $2.5 million. AdStar's shareholder equity stood at $2.08 million as of June 30.

But AdStar Chief Operating Officer Jeffrey Baudo said the company is trying to raise additional capital through a private placement of its securities and expects to meet the listing requirement by Oct. 23, when AdStar has a hearing set before a Nasdaq Listing Qualifications Panel to review the stock exchange's delisting determination of Sept. 16.

"We fully expect it will be remedied shortly," Baudo said in a telephone interview.

Founded in 1986, AdStar powers online classified ad sales for some 60 dailies, mostly large-circulation papers, and CareerBuilder.com.

The Marina del Rey, Calif.-based company grew its year-over-year revenue 17% to $632,000 and dramatically reduced its cash drain from operations in the second quarter, but still reported a net loss of $504,000, up from a net loss of $347,000 in the year-earlier quarter, despite a $1.8 million infusion in early 2002 from Tribune Co., a part-owner of CareerBuilder.

Tribune declined to comment on AdStar's possible delisting.

Baudo said AdStar incurred costs to develop the ability to place print and online ads on CareerBuilder and that he expects losses to decline significantly now that the project is completed.