Image Entertainment Inc. said late Monday that Nasdaq would delist stock on Wednesday, in part due to a violations that took place when the home entertainment distributor obtained new capital and paid off debt last month.

The Chatsworth company said it had received a Nasdaq notice that it had lost its appeal of a Jan. 15 delisting notice issued last month. The Nasdaq Hearing Panel determined that Image violated the market’s rules by not getting shareholder approval for the change in control of the company that took place when the company on Jan. 8 sold about $22 million in preferred shares to JH Partners, a San Francisco private equity firm.

Nasdaq also cited the Image for the way in which it issued 3.5 million shares of common stock that same day to the holder of a senior secured convertible note in exchange for $10,000 in the note’s principal amount. In addition, the panel cited Image for currently not having independent members on its board of directors.

Image, which plans list its stock on the Pink Sheets for the time-being, said it currently does not intend to deregister its common stock with the Securities and Exchange Commission and will continue to file periodic, quarterly and annual reports.

Before the announcement, shares closed up 1 cent, or 3 percent, to 27 cents.