UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 11, 2000
GORAN CAPITAL INC.
State or other jurisdiction of incorporation or organization
CANADA
Commission File Number IRS Employer Id. Number
No. 000-24366 Not Applicable
Address of Principal Executive Offices:
2 Eva Road, Suite 200
Toronto, Ontario, Canada
M9C 2A8
Telephone No.
(317) 259-6400 (USA)
ITEM 5. OTHER EVENTS.
On July 8, 2000, the Company was notified that Nasdaq has deteremined to delist
the Company's securities from The Nasdaq Stock Market effective with the open of
business Monday, July 10, 2000. The decision of Nasdaq is attached as Exhibit 1.
On July 10, 2000, the Company issued the Press Release attached as Exhibit 2.
Goran Capital Inc.
By:
Alan G. Symons
Chief Executive Officer
Date: July 11, 2000
INDEX TO EXHIBITS
(1) Letter from Nasdaq dated July 8, 2000.
(2) Press Release
Exhibit 1
NASDAQ
David A. Donohoe, Jr.
Chief Counsel
Sent via Facsimile and Overnight Commercial Courier
July 8, 2000
Howard Schiffman, Esq.
Dickstein Shapiro Morin & Oshinsky, LLP
2101 L Street, N.W.
Washington, DC 20037-1526
RE: Goran Capital, Inc. (Symbol: GNCNF)
Decision NQ 3280N-00
Request for Modification of Exception
Dear Mr. Schiffman:
We are in receipt of your submission dated June 22, 2000 in which you requested,
on behalf of Goran Capital, Inc. (the "Company"), a 90 day extension of the June
30, 2000 deadline set forth in the Nasdaq Listing Qualifications Panel's (the
"Panel") May 9, 2000 decision, which granted the Company an exception to the
continued listing requirements for the Nasdaq National Market. 1 The Company
also requested that the Panel eliminate the term of the exception, which
required it to evidence a minimum of $15,000,000 in net tangible assets. This
letter shall supersede the decision dated July 7, 2000.2
The Company argued that a 90-day extension and a revision of the terms of the
exception was appropriate for several reasons. First, the Company reiterated its
position with respect to the treatment of Trust-Owned Redeemable Preferred Stock
("TOPRs') that was presented at the April 6, 2000 written hearing. The Company
noted that, although the Panel determined that the TOPRs should be excluded from
Nasdaq's net tangible assets calculation, it has appealed the Panel's decision
to the Nasdaq Listing and Hearing Review Council (the "Review Council"), and it
expects the Review Council to make a decision on the appeal in September 2000.
Second, the Company provided the Panel with details on the progress it has made
in meeting the requirements set forth in the May 9, 2000 decision. Based upon
that progress, the Company believes that a cushion above the $4,000,000 net
tangible assets requirement is no longer necessary. Finally, the Company
asserted that, should the Review Council decide in September 2000 that the TOPRs
should be included in the net tangible assets calculation after its securities
have already been delisted from Nasdaq, the likelihood of a reduction in
liquidity and price of its shares will be "very difficult, if not impossible, to
reverse."3
The Company indicated that it purchased $23,000,000 in face amount of TOPRs for
$2,800,000, thereby increasing its net tangible assets by $20,200,000. Despite
this development the Company conceded that, after excluding the remaining
balance of the TOPRs, it would still have a net tangible assets deficit of
approximately $(4,000,000), based on a March 31, 2000 pro forma balance sheet.
The Company stressed that it has significantly improved its operating results
over the past several months and anticipates a continuation of that trend
through the remainder of fiscal 2000 and 2001. Although the Company asserted
that its "market value of pubic float has been above the $5,000,000 threshold
for a considerable period - well beyond the 10-day requirement," Nasdaq market
data indicates that the Company failed to evidence a market value of public
float of at least $5,000,000 for a minimum of ten consecutive trading days. It
does appear that the Company temporarily evidenced a market value of public
float of at least $5,000,000 for the seven consecutive trading days between June
8 and June 16, 2000 and the four consecutive trading days between June 26 and
June 29, 2000; however, the Company failed to demonstrate "a market value of
public float of at least $5,000,000 for a minimum of ten consecutive trading
days," as required by the Panel's exception. Further, the Company failed to
evidence a $5,000,000 market value of public float on June 30, 2000 and
thereafter. 4
Panel Decision
The Panel observed that the Company failed to satisfy the requirements of the
exception and determine to deny the Company's request for an extension and/or
revision of the terms of the May 9, 2000 decision. While the Panel acknowledged
that, based on the Company's projections, the operating results appear to be
improving, it was concerned that the Company does not satisfy the maintenance
requirements, has continued to incur significant losses through the first five
months of 2000, and projects losses for the fourth quarter as a result of the
interest accrual from the remaining TOPRs.
The Panel noted that its position with respect to the treatment of the TOPRs was
set forth in the original decision letter, and remains unchanged. The Panel was
unable to identify unique or compelling circumstances meriting the modification
of the original decision or a stay of the delisting. Finally, the Panel noted
that the company is not currently in compliance with all requirements for
continued listing on The Nasdaq SmallCap Market.5 Accordingly, the Panel
determined to delist the Company's securities from the Nasdaq Stock Market
effective with the open of business Monday, July 10, 2000.
The Company should be aware that the Review Council may, on its own motion,
determine to review any Panel decision within 45 calendar days after issuance of
the written decision. If the Review Council determines to review this decision,
it may affirm, modify reverse, dismiss, or remand the decision to a Panel. The
Company will be immediately notified in the event the Review Council determines
that this matter will be called for review.
The Company may also request that the Review Council review this decision. The
request for review must be made in writing and received within 15 days from the
date of this decision. Requests must be sent to: Sara Nelson Bloom, Office of
the General Counsel, The Nasdaq Stock Market 1801 K. Street, N.W., 8th Floor,
Washington, DC 20006, (202) 728-8478 and facsimile (202) 728-8321. Pursuant to
Nasdaq Marketplace Rule 4840(b), the Company must submit a fee of $1,400.00 to
the Nasdaq Stock Market, Inc. to cover the cost of the review. Please be advised
that the institution of a review, whether by way of the Company's request or on
the initiative of the Review Council, will not operate as stay on this decision.
The Company's securities may be immediately eligible to trade on the OTC
Bulletin Board. Pursuant to SEC File No. TP97-235, an exemption from Rule
15c2-11 has been granted to permit a broker-dealer, without having the
information specified by the Rule, to publish in, or submit for publication in,
a quotation medium, quotations for a security immediately after such security is
no longer authorized for quotation on The Nasdaq Stock Market, subject to the
following conditions:
1. Removal of the security from authorization for quotation on The
Nasdaq Sock Market must be attributable solely to the issuer's
failure to satisfy the revised initial listing or maintenance
standards, as contained in SEC Release No.
34-38961 (August 22, 1997);
2. The security must have been quoted continuously on The Nasdaq
Stock Market during the 30 calendar days preceding its delisting
from that market, exclusive of any trading halt not exceeding one
day to permit the dissemination of material news concerning the
security's issuer;
3. The issuer of the security must not be the subject of bankruptcy
proceedings;
4. The issuer of the security must be current in all of its periodic
reporting requirements pursuant to Section 13(a) or 15(d)
of the Exchange Act;
5. A broker-dealer relying upon this exemption must have been a
market maker registered with the NASD in the security no longer
eligible for quotation during the 30 day period proceeding the
security's removal from The Nasdaq Stock Market; and,
6. The exemption is available only for securities that were
authorized for quotation on The Nasdaq Stock Market and then
delisted, and not for any other securities of the issuer.
Footnote
1 The Panel's May 9, 2000 decision is hereby incorporated by reference. The
Company's June 22, 2000 submission was a joint request by the Company and Symons
International Group, Inc. ("Symons"). The Company is the parent of Symons, which
is currently operating under an identical Nasdaq exception.
2 All Changes are indicated in italics and bold font. 3 Company's submission to
the Panel, dated June 22, 2000, page 4. 4 Based on the closing bid price of
$1.50 per share on July 6, 2000 [the closing bid price on June 30, 2000 was also
$1.50 per share], and 2,843,654 shares in the public float, as reported in the
most recent proxy statement the Company's current market value of public float
is $4,251,981.
5 Pursuant to the Nasdaq Marketplace Rule 4310(c), a SmallCap issuer must
maintain, among the other things, a minimum of $2,000,000 in net tangible
assets, a $35,00,000 market capitalization or $500,000 in net income in the
latest fiscal year or in two of the last three fiscal years; a $1.00 per share
bid price; 500,000 publicly-held shares; a $1,000,000 market value of the public
float; two market makers; 300 round lot shareholders; and compliance with
Nasdaq's corporate governance centers.
If you have any questions, please do not hesitate to contact me at (301)
978-8070.
Sincerely,
David A. Donohoe, Jr.
Chief Counsel
Nasdaq Listing Qualifications Hearings
Exhibit 2
July 10, 2000
AT THE COMPANY:
Alan Symons/Douglas Symons
(317)259-6302/(317)259-6413
E-mail: asymons@sigins.com
dsymons@sigins.com
GORAN CAPITAL INC. CONTINUES TO BE TRADED ON THE TORONTO STOCK EXCHANGE AND
MOVES TO THE OTC BULLETIN BOARD IN THE UNITED STATES.
Toronto, Ontario, Canada, July 10, 2000 - Goran Capital Inc. (NASDAQ: GNCNF;
TSE: GNC), a leading specialty insurer of nonstandard auto and crop insurance
will continue to trade on the Toronto Stock Exchange and move to the OTC
Bulletin Board in the United States effective July 10, 2000. The Company
reported, in its 10-K for the year-ended 1999, and 10-Q for the first quarter
2000, that it was likely trading of the Company's stock in addition to being
traded on the Toronto Stock Exchange would move from the NASDAQ National Market
to the OTC Bulletin Board. Effective today, the stock will be traded on the
Toronto Stock Exchange and the OTC Bulletin Board under GNC and GNCNF,
respectively.
Goran Capital Inc. (NASDAQ: GNCNF; TSE: GNC) is a leading provider of
nonstandard automobile insurance in the United States. Nonstandard auto
insurance is sold through independent insurance agents and generally carries
higher premiums and low limits of liabilities. Goran's subsidiary, Superior
Insurance Group, writes nonstandard auto insurance in 22 states. IGF Insurance
Company is the fifth largest insurer of crops in the United States and writes
business in 46 states plus Canada. Visit the Company's web site at
www.sigins.com.
"Forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995 may be included in this news release. A variety of factors
could cause the Company's actual results to differ from the reported results
expressed in such forward-looking statements. Investors are referred to the
Company's Forward Looking Statements and Certain Risks (Part I, Item 2 to the
Company's Form 10-Q for the period ended March 31, 2000), which statements are
incorporated into this news release by reference.
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