Nasdaq Stock Market issues noncompliance letter to A.P. Pharma

A.P. Pharma, Inc. (Nasdaq:APPA), a specialty pharmaceutical company, today announced that, on September 15, 2009, the Company received a letter from The Nasdaq Stock Market (Nasdaq) indicating that the minimum closing bid price of its common stock had fallen below $1.00 for 30 consecutive trading days, and therefore, A.P. Pharma was not in compliance with Marketplace Rule 5450(a)(1). The Company has been provided 180 calendar days, or until March 15, 2010, to regain compliance with the minimum bid price requirement. This notice does not impact the Company’s listing on Nasdaq at this time.

A.P. Pharma can regain compliance with the minimum closing bid price rule if the bid price of its common stock closes at $1.00 or higher for a minimum of ten consecutive business days during the initial 180-day compliance period, although Nasdaq may, in its discretion, require the Company to maintain a minimum closing bid price of at least $1.00 per share for a period in excess of ten consecutive business days before determining that A.P. Pharma has demonstrated the ability to maintain long-term compliance.

If A.P. Pharma is not eligible for an additional compliance period, or does not regain compliance during any additional compliance period, Nasdaq will provide written notice to the Company that its securities are subject to delisting. At such time, A.P. Pharma would be able to appeal the delisting determination to a Nasdaq Listing Qualifications Panel (Panel).

As disclosed in the Company’s press release dated July 20, 2009, the Company requested, and on August 18, 2009, attended a hearing before the Panel at which it presented its plan to move from The Nasdaq Global Market to The Nasdaq Capital Market and to comply with the $2.5 million stockholders’ equity requirement for continued listing on The Nasdaq Capital Market. The Panel has not yet issued its determination as a result of that hearing. In the event the Panel grants the Company’s request for continued listing on The Nasdaq Capital Market, the Company will be entitled to a second 180-calendar day grace period, through September 13, 2010, to evidence compliance with the minimum bid price requirement, so long as the Company satisfies all criteria for initial listing on The Nasdaq Capital Market (except for bid price) as of March 15, 2010.