SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14c-5(d)(2))
[ ] Definitive Information Statement
MINORPLANET SYSTEMS USA, INC.
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(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11(set forth the amount on which
the filing fee is calculated and state how it was determined)
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(4) Proposed maximum aggregate value of transaction:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
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MINORPLANET SYSTEMS USA, Inc.
1155 Kas Drive, Suite 100
Richardson, Texas 75081
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INFORMATION STATEMENT
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To the Stockholders of Minorplanet Systems USA, Inc.:
This information statement is being mailed to the stockholders of
Minorplanet Systems USA, Inc., a Delaware corporation, to give you notice of the
corporate actions we intend to take to approve an amendment to our restated
certificate of incorporation to effect a one-for-five reverse stock split of our
common stock. Mackay Shields LLC and Erin Mills Investment Corporation, which
together hold the voting power of more than a majority of our issued and
outstanding shares of common stock, have executed a written consent approving
the amendment to the certificate of incorporation. Accordingly, all necessary
corporate approvals in connection with the matters referred to herein have been
obtained, and this information statement is furnished solely for the purpose of
informing our other stockholders, in the manner required under the Securities
Exchange Act of 1934, of these corporate actions before they take effect. The
record date for determining stockholders entitled to receive this information
statement has been established as the close of business on November 7, 2003.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US
A PROXY.
On October 9, 2003, our board of directors proposed amending Article IV
of our certificate of incorporation to effect a one-for-five reverse stock
split. The proposed amendment will reduce the number of issued and outstanding
shares of our common stock by approximately 4/5, with each 5 shares of common
stock currently outstanding, referred to as "old common stock," becoming 1 share
of "new common stock." Further, each option to purchase 5 shares of our common
stock under our 1994 stock option plan will become the option to purchase 1
share of our common stock. The text of this proposed amendment is attached to
this information statement as Appendix A.
Under Delaware law, any action that is required to be taken, or that
may be taken, at any annual or special meeting of stockholders of a Delaware
corporation may be taken, without a meeting, without prior notice and without a
vote, if a written consent, setting for the action taken, is signed by the
holder or holders of the outstanding voting securities having not less than the
minimum number of votes necessary to authorize such action. As of November 7,
2003, the date on which the stockholders holding more than 50% of the voting
power of our issued and outstanding common stock executed the stockholder
consent, Mackay Shields LLC held the voting power for 10,699,794 shares and Erin
Mills owned 22,196,182 shares of our common stock, which is approximately 22%
and 46.0%, respectively, of the total number of outstanding shares of our common
stock, our sole voting security. Because the reverse stock split has been
approved by a majority of the issued and outstanding shares of common stock as
required by Delaware law, no further votes are required. Corporate actions taken
by written consent of these two stockholders will take effect approximately 21
days after the mailing of this information statement, which date is on or about
December 3, 2003. After the effectiveness of the written consent of our majority
stockholder, we intend to file an amendment to our restated certificate of
incorporation to effect a one-for-five reverse stock split of our common stock,
acquire a new CUSIP number for our common stock and make all other Nasdaq and
regulatory filings. Our board of directors and management are not aware of any
other action that will be authorized in such consent.
This information statement is first being sent or given to our
stockholders on or about November 12, 2003.
November 12, 2003
OUTSTANDING SECURITIES AND VOTING RIGHTS
Only holders of record of our common stock as of the close of business
on November 7, 2003, the record date, will be entitled to receive this
information statement. As of the close of business on the record date, there
were 48,349,161 shares of common stock issued and outstanding and entitled to
vote on matters on that date.
QUORUM AND VOTING
The affirmative vote of a majority of the issued and outstanding shares
of our common stock is required for the approval of the amendment to our
restated certificate of incorporation which will effect the one-for-five reverse
split. Each holder of common stock is entitled to one vote in person or by proxy
for each share of common stock in his, her or its name on our books as of the
record date on any matter submitted to a vote at a meeting of the stockholders.
However, under Delaware law, any action which may be taken at any stockholders'
meeting may be taken by written consent of the holders of the requisite number
of shares of common stock required to take such action. There will be no broker
non-votes or abstentions in the tabulation of votes as two stockholders (which
collectively hold more than a majority of our outstanding shares of common
stock) are acting by majority written consent.
DISSENTER'S RIGHTS
Delaware law does not provide for dissenter's rights or rights of
appraisal with respect to the matter acted upon by the written consent of the
majority of our stockholders.
THE ONE-FOR-FIVE REVERSE STOCK SPLIT
PURPOSE OF THE REVERSE SPLIT
The purpose of the reverse stock split is to facilitate the continued
listing of our common stock on the Nasdaq SmallCap Market. On October 8, 2003,
we received a notice from Nasdaq that our common stock has failed to maintain a
minimum bid price of $1.00 on a consistent basis as required for continued
listing on the Nasdaq SmallCap Market. Nasdaq expressed concern about our
ability to maintain the minimum bid price of $1.00 in the future, and allowed us
90 days to effect a reverse stock split. This letter follows the written
notifications we received from Nasdaq on October 11, 2002 and April 10, 2003,
respectively, in which Nasdaq granted us two 180-day extensions to meet the
minimum closing bid price requirement. During the last 12 months, the closing
bid price of our common stock has ranged from $0.43 to $0.98 per share. The
October 8, 2003 letter is attached to this information statement as Appendix B.
Nasdaq has informed us that the closing price of our common stock must be over
$1.00 for a period of 10 consecutive days by January 6, 2004 or our common stock
will be delisted. Hence, our common stock will probably be delisted from Nasdaq
if reverse stock split is not completed.
POTENTIAL CONSEQUENCES
If the market price for our common stock remains below $1.00 per share
and we are no longer listed on the Nasdaq SmallCap Market, our common stock may
be deemed to be penny stock. If our common stock is considered penny stock, it
will be subject to rules that impose additional sales practices on
broker-dealers who sell our securities. For example, broker-dealers selling
penny stock must make a special suitability determination for the purchaser and
must have received the purchaser's written consent to the transaction prior to
sale. Also, a disclosure schedule must be prepared before any transaction
involving a penny stock can be completed, and disclosure is required about:
o sales commissions payable to both the broker-dealer and the
registered representative; and
o current quotations for the securities.
Monthly statements are also required to be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stock. Because of these additional obligations, some
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brokers may not effect transactions in penny stocks. This could have an adverse
effect on the liquidity of our common stock.
The board of directors believes that the reverse stock split is likely
to result in the bid price of our common stock rising above the $1.00 minimum
bid price requirement, thereby permitting the continued listing of our common
stock on the Nasdaq SmallCap Market. However, there can be no assurance that the
market price of our common stock will rise in proportion to the reduction in the
number of outstanding shares resulting from the reverse stock split or that the
market price of our common stock will rise or remain above $1.00 after the
one-for-five reverse stock split.
EFFECTIVENESS OF THE REVERSE STOCK SPLIT
The reverse stock split will become effective at such time as we file
the amendment to our restated certificate of incorporation with the Delaware
Secretary of State. Even if the reverse stock split is approved by stockholders,
our, board of directors has discretion not to carry out the reverse stock split
if it determines that the reverse split is not necessary to avoid the delisting
of our common stock from the Nasdaq SmallCap Market, based on market prices at
the time, or it determines that the split will not be beneficial for any other
reason. Upon the filing of the amendment, all the old common stock will be
converted into new common stock as set forth in the amendment.
CERTIFICATES AND FRACTIONAL SHARES
As soon as practicable after the effective date of the reverse stock
split, we will request all stockholders to return their stock certificates
representing shares of old common stock outstanding on the effective date in
exchange for certificates representing the number of whole shares of new common
stock into which the shares of old common stock have been converted as a result
of the reverse stock split. Each stockholder will receive a letter of
transmittal from our transfer agent containing instructions on how to exchange
certificates. STOCKHOLDERS SHOULD NOT SUBMIT THEIR OLD CERTIFICATES TO THE
TRANSFER AGENT UNTIL THEY RECEIVE THESE INSTRUCTIONS. In order to receive new
certificates, stockholders must surrender their old certificates in accordance
with the transfer agent's instructions, together with the property executed and
completed letter of transmittal.
Beginning with the effective date, each old certificate, until
surrendered and exchanged as described above, will be deemed for all purposes to
evidence ownership of the number of whole shares of new common stock into which
the shares evidenced by the old certificates have been converted. No fractional
shares will be issued. In lieu of any fractional shares, each holder of old
common stock who would otherwise have been entitled to a fraction of a share of
new common stock upon surrender of the holder's certificates will be entitled to
receive a cash payment, without interest, determined by multiplying:
o the fractional share to which the holder would otherwise be
entitled, after taking into account all shares of old common
stock then held of record by the holder; and
o the average last sale price of shares of old common stock for
the 20 trading days immediately before the effective date, or
if no such sale takes place on such days, the average of the
closing bid and asked prices for such days, in each case as
officially reported on the Nasdaq SmallCap Market.
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EFFECTS OF THE REVERSE STOCK SPLIT
The principal effect of the reverse stock split will be to decrease the
number of shares of common stock that will be outstanding from approximately
48,349,161 to approximately 9,669,832 shares. In addition, the board of
directors will take appropriate action to adjust proportionately the number of
proposed stock issuance shares of common stock issuable upon exercise of
outstanding options under the 1994 stock option plan to reflect the reverse
stock split. All of our outstanding warrants will be automatically adjusted to
reflect the reverse stock split. As a result, following the effective date, the
number of shares of common stock issuable upon the exercise of outstanding
options under the 1994 stock option plan will be reduced from approximately
1,627,424 shares to approximately 325,484 shares.
We expect the reduction in the number of outstanding shares to increase
the bid price of our common stock, although there can be no assurance that the
price will increase in inverse proportion to the one-for-five reverse stock
split ratio. The trading price of our common stock depends on many factors, many
of which are beyond our control. The higher stock price may increase investor
interest and reduce resistance of brokerage firms to recommend purchasing our
common stock.
The liquidity of our common stock may be adversely affected by the
reduced number of shares outstanding after the reverse stock split. In addition,
the split will increase the number of stockholders who own odd-lots. An odd-lot
is fewer than 100 shares. Stockholders who hold odd-lots may experience an
increase in the cost of selling their shares and may have greater difficulty in
making sales.
The shares of new common stock will be fully paid and non-assessable.
The amendments will not change the terms of our common stock. The shares of new
common stock will have the same voting rights and rights to dividends and
distributions and will be identical in all other respects to the common stock
now authorized. Because no fractional shares of new common stock will be issued,
any stockholder who owns fewer than 5 shares of old common stock will cease to
be one of our stockholders on the effective date. We do not anticipate that the
reverse stock split will result in any material reduction in the number of
holders of common stock. No stockholder's percentage ownership of the new common
stock will be altered by the reverse stock split except for the effect of
eliminating fractional shares. We estimate that the cost to pay for the
fractional shares will not be material.
While our issued and outstanding shares will be reduced by 4/5ths, our
authorized common stock will not be reduced. Hence, the overall effect will be
an increase in the number of authorized but unissued shares of common stock. Our
board of directors may issue these shares in its discretion. Any future issuance
will have the effect of diluting the percentage of stock ownership and voting
rights of the present holders of common stock.
While the board of directors believes it advisable to authorize and
approve the reverse stock split for the reasons set forth above, the board of
directors is aware that the increase in the number of authorized but unissued
shares of common stock may have a potential anti-takeover effect. Our ability to
issue additional shares could be used to thwart persons, or otherwise dilute the
stock ownership of stockholders seeking to control us. The reverse stock split
is not being recommended by the board as part of an anti-takeover strategy.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT
The following description of certain federal income tax consequences of
the reverse stock split is based on the Internal Revenue Code of 1986,
applicable U.S. Treasury Regulations promulgated thereunder, judicial authority
and current administrative rulings and practices as in effect on the date of
this information statement, which are subject to change prospectively as well as
retroactively. This discussion is for general information only and does not
discuss consequences which may apply to special classes of taxpayers (for
example, banks, regulated investment companies, personal holding companies,
tax-exempt entities, nonresident aliens, broker-dealers or insurance companies)
or any aspects of state, local or foreign tax laws. STOCKHOLDERS ARE URGED TO
CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO
THEM OF THE REVERSE STOCK SPLIT.
Because the reverse stock split is not part of a plan to increase
periodically a stockholder's proportionate interest in our assets or earnings
and profits, and because cash is being issued in lieu of fractional shares to
avoid the trouble, expense and inconvenience of issuing fractional shares, the
reverse stock split should not result in the
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recognition by stockholders of any gain or loss for federal income tax purposes
(except to the extent of the cash received in lieu of fractional shares). The
holding period for each share of new common stock received by a stockholder will
include the stockholder's holding period for its shares of old common stock with
respect to which the shares of new common stock are issued, provided that the
shares of old common stock were held as capital assets. The adjusted tax basis
of each share of new common stock received by a stockholder (including the
fractional share for which cash is received) will be the same as the adjusted
tax basis of the shares of old common stock with respect to which the share of
new common stock is issued. A stockholder who receives cash in lieu of a
fractional share of new common stock generally will recognize taxable gain or
loss equal to the difference, if any, between the amount of cash received and
the portion of the stockholder's aggregate adjusted tax basis in the shares of
old common stock allocated to the fractional share. If the shares of old common
stock allocated to the fractional shares were held by the stockholder as capital
assets, the gain or loss resulting from the payment of cash in lieu of the
issuance of a fractional share will be taxed as capital gain or loss.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of November 7,
2003, regarding beneficial ownership of our common stock and the percentage of
total voting power held by:
o each stockholder who is known by us to own more than five
percent (5%) of our outstanding common stock;
o each director;
o each executive officer; and
o all directors and executive officers as a group.
Unless otherwise noted, the persons named below have sole voting and investment
power with respect to such shares. The beneficial ownership information is based
on the most recent Schedule 13D or 13G filed with the SEC by the named
stockholders.
<Table>
<Caption>
NUMBER OF SHARES OF COMMON
STOCK BENEFICIALLY PERCENT OF CLASS
NAME OF HOLDER OWNED BENEFICIALLY OWNED
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Erin Mills Investment Corporation 22,196,182 46.0%
7501 Keele Street, Suite 500
Concord, Ontario L4K 1Y2
Minorplanet Systems PLC 9,621,483 19.9%
Greenwich House
Sheepscar, Leeds LS4 2LE
United Kingdom
Mackay Shields LLC 10,699,794 22.1%
9 West 57th Street
New York, NY 10019
Gerry C. Quinn (1) 54,530 *
John T. Stupka (1) 3,798 *
Michael D. Beverley DL, DA, SCA, SRSA -- --
David H. Bagley (1) 15,901 *
J. Raymond Bilbao (1) 5,480 *
Robert Gray 402
Robert J. Lambert, Jr. (1) 17,400 *
W. Michael Smith (1) 16,480 *
Ron Thompson (1) 8260 *
All directors and executive officers as a 121,849 *
group (9 persons) (2)
</Table>
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* Less than 1%
(1) This individual does not actually own any shares of common stock. This
number represents the number of shares that this individual may acquire
upon the exercise of stock options that are exercisable within 60 days
of November 7, 2003.
(2) All directors and executive officers (9 persons) collectively own 402
shares of common stock and beneficially own 121,447 shares of common
stock issuable upon the exercise of stock options that are exercisable
within 60 days of November 7, 2003.
CHANGE OF CONTROL OF MINORPLANET SYSTEMS USA, INC.
On October 7, 2003, we announced Minorplanet Systems PLC, a United
Kingdom public limited company (MPUK) transferred 42.1% (approximately 20.4
million shares) of our outstanding shares of common
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stock to Erin Mills, ending MPUK's majority ownership of us effective October 6,
2003. Following this share transfer, Erin Mills now holds 46 percent
(approximately 22.2 million shares) of our outstanding common stock, while MPUK
retains 19.9% (approximately 9.6 million shares) of the outstanding common
stock.
In connection with the MPUK share transfer to Erin Mills, we also
obtained the option to repurchase from Erin Mills up to 19.4 million shares of
our common stock at an exercise price of $0.01 for every 1,000 shares we
repurchase, pursuant to that certain Stock Repurchase Option Agreement between
us and Erin Mills dated August 15, 2003. Gerry Quinn, the president of Erin
Mills, currently serves on our board of directors. The Stock Repurchase Option
Agreement is filed as Exhibit 99.2 to our Form 8-K filed with the SEC on August
27, 2003.
In addition we also closed the following transactions with MPUK on
October 7, 2003 pursuant to the letter agreement dated August 15, 2003 (filed as
Exhibit 99.1 to our Form 8-K filed with the SEC on August 27, 2003):
o MPUK irrevocably waived certain approval rights, including the
right to appoint members to our board of directors, as are
currently provided for in that certain Stock Purchase and
Exchange Agreement dated February 14, 2001 and our bylaws;
o MPUK waived $1.8 million of accrued executive consulting fees
that it had previously billed to us.
o The exclusive License and Distribution Agreement, which grants
to our United Kingdom-based subsidiary a 99-year,
royalty-free, exclusive right and license to market, sell and
commercially exploit the Vehicle Management Information(TM)
(VMI(TM)) technology in the United States, Canada and Mexico,
was amended to grant MPUK, or its designee, the right to
market and sell the VMI technology, on a non-exclusive basis,
in the Northeast region of the United States. We retained the
right to market and sell the VMI technology under the
Minorplanet name and logo in this Northeast region.
o MPUK obtained anti-dilution rights from us, under which it has
the right to subscribe for and to purchase at the same price
per share as the offering or private sale, that number of
shares necessary to maintain the lesser of (i) the percentage
holdings of our stock on the date of subscription or (ii) 19.9
percent of our issued and outstanding common stock.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No director, executive officer, associate of any director or executive
officer or any other person has any substantial interest, direct or indirect, by
security holdings or otherwise, in the proposed reverse stock split which is not
shared by all other stockholders, pro rata.
OTHER MATTERS
There is no other business to be transacted by written consent in lieu
of a special meeting to which this information statement pertains.
ADDITIONAL INFORMATION
PLEASE READ THE ENTIRE DOCUMENT. Further information is available by
request or can be accessed on the Internet. The complete mailing address of our
principal executive offices is 1155 Kas Drive, Suite 100, Richardson, Texas
75081. We are subject to the informational requirements of the Securities
Exchange Act of 1934, and in accordance therewith file annual and quarterly
reports, proxy statements and other information with the SEC. Reports, proxy
statements and other information filed by us can be accessed electronically by
means of the SEC's home page on the Internet at http://www.sec.gov. You can read
and copy any materials that we file with the SEC at the SEC's Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can obtain
information about the operation of the SEC's Public Reference Room by calling
the SEC at 1-800-SEC-0330. A
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copy of any public filing is also available, at no charge, by contacting our
secretary, J. Raymond Bilbao, at (972) 301-2000.
By Order of the Board of Directors
J. Raymond Bilbao,
Senior Vice President, Secretary and
General Counsel
Richardson, Texas
November 12, 2003
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APPENDIX A
MINORPLANET SYSTEMS USA, INC.
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION
Article IV of the Corporation's Restated Certificate of Incorporation
is hereby amended by deleting said Article IV in its entirety and replacing it
with the following in lieu thereof:
"IV. CAPITALIZATION
The aggregate number of shares of capital stock which the corporation
shall have authority to issue is 100,020,000 shares consisting of 100,000,000
shares of common stock, par value $0.01 per share (the "Common Stock"), and
20,000 shares of preferred stock, par value $0.01 per share. Each holder of a
share of Common Stock shall be entitled to one vote for each share held in any
stockholder vote in which any of such holders is entitled to participate. On
June 4, 2001, the corporation previously effected a one-for-five reverse stock
split, and this Amendment is intended to effect a second one-for-five reverse
stock split.
Simultaneously with the effective date of the filing of this Amendment
to the Restated Certificate of Incorporation (the "Effective Date"), each five
(5) shares of Common Stock (and each option, warrant and all other securities
convertible into shares of Common Stock, that represent the right to acquire
five (5) shares of Common Stock) of the corporation issued and outstanding or
held as treasury shares immediately prior to the Effective Date (the "Old Common
Stock") shall automatically be reclassified and continued (the "Reverse Split"),
without any action on the part of the holder thereof, as one (1) share of Common
Stock (or as an option, warrant or other security convertible into shares of
Common Stock, into the right to acquire one (1) share of Common Stock, as they
case may be). The corporation shall not issue fractional shares on account of
the Reverse Split. Holders of Old Common Stock who would otherwise be entitled
to a fraction of a share on account of the Reverse Split shall receive, upon
surrender of the stock certificates formerly representing shares of the Old
Common Stock, in lieu of such fractional share, an amount in cash (the
"Cash-in-Lieu Amount") equal to the product of (i) the fractional share which a
holder would otherwise be entitled to, multiplied by (ii) the average of the
last sale price per share of the Old Common Stock on the 20 trading days
immediately prior to the Effective Date or, if no such sale takes place on such
days, the average of the closing bid and asked prices thereof for such days, in
each case as officially reported on the Nasdaq SmallCap Market. No interest
shall be payable on the Cash-in-Lieu Amount.
The Board of Directors of the corporation, by resolution or
resolutions, may at any time and from time to time, divide and establish any or
all of the unissued shares of preferred stock not then allocated to any series
of preferred stock into one or more series and, without limiting the generality
of the foregoing, fix and determine the designation of each such share, the
number of shares which shall constitute such series and certain powers,
preferences and relative, participating, optional or other special rights and
qualifications, limitations and restrictions and voting rights of the shares of
each series so established."
APPENDIX B
[NASDAQ STOCK MARKET
LETTERHEAD]
By Facsimile and Overnight Mail
October 8, 2003
Mr. W. Michael Smith
Executive Vice President and Chief Financial Officer
Minorplanet Systems, Inc.
1155 Kas Drive, Suite 100
Richardson, TX 75081
Re: Minorplanet Systems, Inc. (the "Company")
Nasdaq Symbol: MNPL
Dear Mr. Smith:
On October 11, 2002, Staff notified the Company that the bid price of its common
stock had closed at less than $1.00 per share over the previous 30 consecutive
trading days, and, as a result, did not comply with Marketplace Rule 4310(c)(4)
(the "Rule"). Therefore, in accordance with Marketplace Rule 4310(c)(8)(D), the
Company was provided 180 calendar days, or until April 9, 2003, to regain
compliance with the Rule. Furthermore, on April 10, 2003, the Company was
provided an additional 180 calendar days, or until October 7, 2003, to regain
compliance with the Rule. The Company has not regained compliance in accordance
with Marketplace Rule 4310(c)(i)(D).
However, Staff notes that the Company meets the initial listing requirements for
The Nasdaq SmallCap Market under Marketplace Rule 4310(c)(2)(A).(1)
Specifically, the Company qualifies with the $5 million stockholders' equity for
the period ended May 31, 2003. As of May 31, 2003, the Company has stockholders'
equity of $23,313,000. Therefore, in accordance with Marketplace Rule
4310(c)(8)(D), the Company will now be provided an additional 90 calendar days,
or until January 6, 2004, to regain compliance.(2) If, at anytime before January
6, 2004, the bid price of the Company's common stock closes at $1.00 per share
or more for a minimum of 10 consecutive trading days, Staff will provide written
notification that the Company complies with the Rule.(3) If compliance with this
Rule cannot be demonstrated by January 6, 2004, Staff will provide written
notification that the Company's securities will be delisted. At that time, the
Company may appeal Staff's determination to a Listing Qualifications Panel.
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(1) Marketplace Rule 4310(c)(a)(A) states that "[f]or initial inclusion, the
issuer shall have (i) stockholders equity of $5 million; (ii) market value of
listed securities of $50 million ...; or (iii) net income from continuing
operations of $750,000 in the most recently completed fiscal year or in two of
the last three most recently completed fiscal year or in two of the last three
most recently completed fiscal years."
(2) The 90 day period relates exclusively to the bid price deficiency. The
Company may be delisted during the 90 days period for failure to maintain
compliance with any other listing requirements for which it is currently on
notice or which occurs during this period.
(3) Under certain circumstances, to ensure that the Company can sustain
long-term compliance, Staff may require that the closing bid price equals $1.00
per share or greater for more than 10 consecutive business days, but, generally,
not more than 20 consecutive business days before determining that the Company
complies. In determining whether to monitor the bid price beyond 10 business
days, Nasdaq will consider the following four factors: (i) margin of compliance;
(ii) trading volume; (iii) the number of market makers and the size of their
quotes; and, (iv) the trend of the price of the security.
If you have any questions, please do not hesitate to contact me at (301)
978-8048.
Sincerely,
/s/ Marilyn Bacot
- -----------------------------
Marilyn Bacot
Listing Analyst
Nasdaq Listing Qualifications