Salton Inc. (SFP), which makes the George Foreman grill (search), on Wednesday said it received a warning from the New York Stock Exchange that its shares may be delisted because of low market capitalization.

Shares of the small-appliance maker have fallen sharply in recent months on fears that it may file for bankruptcy. Last month the company missed an interest payment, causing concern about its solvency.

Salton said that if its average market capitalization is less than $25 million over the 30 trading-day period ending July 29, its common stock would probably be subject to prompt suspension and delisting procedures.

Salton shares fell nearly 3 percent on the New York Stock Exchange (search).

The Lake Forest, Ill.-based company also said it commenced a private debt exchange offer for its senior notes. Upon closing of the exchange offer, a new independent board member chosen by the holders of a majority of the notes will join Salton's board.

Salton said the NYSE would take into consideration the effect of the exchange offer on its market capitalization, but there were no assurances that this would prevent delisting.

Last month the company asked corporate bond investors to restructure the terms of their bonds in an attempt to avoid bankruptcy. It has been cutting costs as it struggles with waning demand for the George Foreman grill and a high debt load.

The exchange offer for Salton's senior subordinated notes involves issuing new notes and shares of preferred and common stock. It expires on Aug. 2.

Demand for the George Foreman grill peaked in 2002 and then tailed off as the market grew saturated because of competition from other low-priced appliances.

Sales of the George Foreman grill improved in the third quarter ended on April 2, but the company said margin pressure continued as raw material and energy costs rose.

Salton has been trying to cut costs, but has struggled to raise prices because of an inventory glut.

The company's shares were down 3 cents at $1.08. The stock has fallen about 86 percent from a 14-month high of $7.45 reached in September.