U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT ON FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 21, 2002
Commission File No. 0-22524
MENDOCINO BREWING COMPANY, INC.
(Exact name of small business issuer as specified in its charter)
California
(State or other jurisdiction of incorporation or organization)
68-0318293
(IRS Employer Identification Number)
13351 South Highway 101
Hopland, California
(Address of principal executive offices)
95449
(Zip Code)
Registrant's telephone number, including area code: (707) 744-1015
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Item 5. Other Events
Resolution of Proposed Delisting Action
The Company's common stock is currently listed for trading with the Pacific
Exchange, Inc. (the "Pacific Exchange"). On February 4, 2002, the Company
received notice from PCX Equities, Inc., a subsidiary of the Pacific Exchange
("PCXE") that the Company's common stock may be subject to the initiation of
delisting proceedings. The determination was based on the Company's
non-compliance with the PCXE requirement that the Company maintain a minimum bid
price of $1.00 per share. As of March 8, 2002, the bid price of the Company's
common stock was $0.50 per share.
The notice from PCXE stated that PCXE would conduct a formal meeting on
Tuesday, March 5, 2002, to review the Company's listing status and any actions
taken by the Company to address the share bid price deficiency. The Company was
invited to submit written information to PCXE explaining why the Company
believes its common stock should not be delisted. On February 21, 2002, the
members of the Company's Board of Directors unanimously resolved to present to
PCXE, for consideration at the meeting, a proposal to undertake a reverse stock
split with respect to the Company's common stock.
The proposal provides that the Board of Directors will request shareholder
approval at the Company's Annual Meeting of Shareholders scheduled for May 20,
2002, to effect a one-for-three reverse split of its Common Stock, to become
effective as soon as practicable following shareholder approval of this action.
The reverse stock split would be carried out by means of an amendment to the
Company's Articles of Incorporation, which requires shareholder approval under
California law. Once this proposal has received the necessary shareholder
approval, the Company will file the amended Articles of Incorporation with the
California Secretary of State. The proposed reverse stock split would be
effective immediately upon the Secretary of State's receipt of the amended
Articles of Incorporation.
After the proposed reverse stock split has become effective, the Company
anticipates that the per share bid price of the common stock should increase to
approximately three times the then-current trading price for the Company's
stock, which would be well above the $1.00 minimum bid price required by PCXE.
The Company's proposal to PCXE also states that the Company's management is
currently in discussions with an independent professional investor relations
company regarding its engagement to assist the Company in the promotion of its
common stock, to current shareholders as well as to potential new investors, and
to provide the Company with introductions to prospective market makers.
Management hopes that, combined with the increase in the per share value of the
Company's common stock caused by the proposed reverse stock split, these
increased promotional efforts, and the active involvement of one or more market
makers, will increase levels of trading, providing additional support for the
Company's post-split share bid price.
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In a letter to the Company dated March 6, 2002, PCXE stated that based upon
the information contained in the Company's proposal to PCXE, PCXE had determined
to provide the Company with a forty-five day extended compliance period for the
completion of specific milestones relevant to remediation of the Company's share
bid price deficiency. The Company will submit a written report to PCXE on or
before April 17, 2001 in order to update PCXE on the status of (i) the approval
of the reverse stock split by the Company's Board of Directors, (ii) the filing
of the Company's preliminary proxy statement with the Securities and Exchange
Commission (the "SEC"), and (iii) the engagement of an independent professional
investor relations company. Provided that the Company has satisfactorily
completed those milestones, PCXE should continue to extend the Company's
compliance period until such time as the Company's Annual Meeting of the
Shareholders has been held and the reverse stock split has been effected.
If, at its Tuesday, April 23, 2002 meeting PCXE decides that the Company
has not met its obligations with regard to its completion of the milestones, it
is likely that the Company's common stock will be suspended from trading before
the opening of business on Wednesday, April 24, 2002. The Company will have the
right to apply, within five (5) days, to the PCXE Board Appeals Committee for an
appeal hearing.
If no appeal is requested, all trading in the Company's common stock will
remain suspended until the SEC strikes the Company's common stock from listing
on the Pacific Exchange. If the Company requests an appeal, trading in the
Company's common stock will remain suspended until the PCXE Board Appeals
Committee comes to a final decision on whether to delist the Company's common
stock. If the Board Appeals Committee determines that the Company's common stock
should not be delisted, the suspension will be lifted. However, if the PCXE
Board Appeals Committee upholds the initial decision to delist the Company's
stock, then the suspension will remain in effect until the SEC strikes the stock
from listing on the Pacific Exchange.
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SIGNATURES
Pursuant to the requirements on the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MENDOCINO BREWING COMPANY, INC.
(Registrant)
Date: March 8, 2002 By: /s/ N. Mahadevan
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N. Mahadevan, Secretary and
Chief Financial Officer
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