Shares will remain tradable, just not on NASDAQ.  Firms are frequently given time to work their way out of a share price below $1, typically 90 days.  They generally offer more stock, increasing capital, but diluting current shareholders.  Even if delisted from NASDAQ, the stock would still trade either over the counter or via pink sheets.

Yesterday, SMSI was also removed from the Standard and Poors Small Cap 600.  They do not qualify as a small cap company any more.  They were replaced by Kids Brands, purveyor of infant and juvenile products.  Yikes.

Yes, SMSI was far cheaper - in 2002.  The stock has gone from $17 / share to about $1 / share in the course of 2011.  The layoffs are an attempt to match costs to revenues, as the company said in it's filings.

The real problem is the fact that a valuation of goodwill was triggered by the plunging share price (also in their filings).  Since the company carries over $100 million in goodwill on it's books, and has a current market capitalization of $41 million, a write down could be an issue.

Poser is not a factor in this, it's the mobile phone software which drove the company's success and is now generating significantly lower income than anticipated.  Poser is a small asset, likely to be disposed if there is a reorganization.  Who are the potential buyers - that's the interesting question.

Klebnor

Lotus 123 ~ S-Render ~ OS/2 WARP ~ IBM 8088 / 4.77 Mhz ~ Hercules Ultima graphics, Hitachi 10 MB HDD, 64K RAM, 12 in diagonal CRT Monitor (16 colors / 60 Hz refresh rate), 240 Watt PS, Dual 1.44 MB Floppies, 2 button mouse input device.  Beige horizontal case.  I don't display my unit.