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  Listing Council Decision 2007-6
Identification Number 634
Rule 4450(a)(3): To continue its listing on the NASDAQ Global Market, the issuer must maintain stockholders’ equity of at least $10 million.
Issue: The company reported a stockholders’ equity (deficit) of ($5,148,000) at December 31, 2005. Furthermore, the company’s plan to increase its stockholders’ equity was not sufficiently definitive at the time of the Panel or Listing Council’s decisions.
Determination: The company was properly suspended, pending delisting because it had violated the $10,000,000 minimum stockholders’ equity requirement, as set forth in Listing Rule 4450(a)(3), and its plan to regain compliance was not sufficiently definitive. The Listing Council finds that the Panel appropriately delisted the company’s securities from the Global Market because at the time of the Panel decision, the company reported stockholders’ equity (deficit) of ($5,148,000). Furthermore, the company’s plan to increase its stockholders’ equity was not sufficiently definitive at the time of the Panel decision. The Listing Council noted that the company has been deficient with the stockholders’ equity requirement for more than twelve months, was not in compliance as of the date of these deliberations, and has not provided any definitive documentation regarding potential increases of equity which could be accomplished in the short-term.
Although the company has argued that the trial against the U.S. for the taking of the business of its subsidiary has been completed, the company has not provided any evidence of: (i) a decision in favor of the company, (ii) the amount of any potential award, or (iii) a timetable as to when any potential award would be paid. With regards to the company’s alternative plan of compliance, the settlement of real estate claims, again, there is no public information that supports a settlement has been reached. Absent, information that a settlement had been reached with a sum certain, the Listing Council cannot provide the company with relief. Even if the company was successful in its settlement and was able to reverse the $8,000,000 in charges, the company would still not be able to demonstrate compliance with the $10,000,000 stockholders’ equity requirement.
The Listing Council finds that there is too little information to assume that the two alternatives presented by the company would in fact be completed in a timely manner, if at all. Given that the settlement alone is insufficient for the company to be able to demonstrate compliance, the Listing Council is not willing to provide the relief that the company is requesting.
The Listing Council also considered, and was: (i) concerned about by the company’s argument at the Panel level that its generally accepted accounting principles based historical financial statements were prepared on conservative basis, and (ii) concerned about the recent resignation of the company’s independent auditors. As such, the Listing Council affirms the Panel’s decision to suspend and delist the company’s securities because it has not demonstrated the ability to regain compliance in the near term or maintain compliance over the long term with stockholders’ requirement as set forth in Listing Rule 4450(a)(3), and has not presented a definitive plan that will allow it to regain compliance with this requirement in the near term or maintain compliance over the long term.
Publication Date*: 7/31/2012 Mailto Link Identification Number: 634
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