EXHIBIT 99.2
Sent via Facsimile and Overnight Commercial Courier
May 3, 2004
Mr. J. Raymond Bilbao
Senior Vice President, General Counsel and Secretary
Minorplanet Systems USA, Inc.
1155 Kas Drive, Suite 100
Richardson, Texas 75081
Re: Minorplanet Systems USA, Inc. (System: MNPLQ)
Nasdaq Listing Qualifications Hearings
Docket NQ 4553C-04
Dear Mr. Bilbao:
This is to inform you that, pursuant to the March 11, 2004 oral hearing before a
Nasdaq Listing Qualifications Panel (the "Panel"), a determination has been made
in the matter of Minorplanet Systems USA, Inc. (the "Company") and its request
for continued inclusion on The Nasdaq SmallCap Market, pursuant to an exception
to the minimum bid price requirement, as set forth in Nasdaq Marketplace Rule
4310(c)(4), and notwithstanding staff's concerns regarding the Company's recent
filing for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code,
which were raised in accordance with Marketplace Rules 4300 and 4330(a)(1).(1)
After a careful review of the entire record, the Panel relied upon the following
information in reaching its determination. The Company develops and implements
mobile communications solutions for service vehicle fleets, long-haul truck
fleets, and other mobile-asset fleets, including integrated voice, date and
position location services. By press release dated February 2, 2004, the Company
announced that it had filed for protection under Chapter 11 of the U.S.
Bankruptcy Code. On that same date, Nasdaq notified the Company that its
securities were subject to delisting based upon staff's concerns regarding the
bankruptcy filing. On February 4, 2004, the Company requested a hearing, which
stayed staff's delist determination. Subsequent to the hearing, on April 20,
2004, the Company was also notified that it failed to satisfy the $1.00 bid
price requirement for thirty consecutive trading days. The Company was provided
with an opportunity to respond to the additional deficiency and did so by
correspondence dated April, 26, 2004.(2)
The Company's Form 10-Q for the quarter ended February 29, 2004 reported total
assets of $48,405,000 and shareholders' equity of $16,945,000. Revenue and net
income (loss) for the six
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(1) In addition to the foregoing, by letter dated December 16, 2003, Nasdaq
staff granted the Company a "cure" period within which to satisfy the
independent director and audit committee requirements set forth in Marketplace
Rules 4350 (c) (1) and 4350(d)(4), respectively, through the earlier of the
Company's next annual shareholders' meeting or October 6, 2004.
(2) The April 26th correspondence was received by the Hearings Department on
April 28, 2004.
month period ended February 29, 2004 totaled $12,784,000 and $(4,626,000),
respectively.(3) The Company reported 9,671,484 total shares outstanding and
1,166,262 publicly held shares. The closing bid price for the Company's common
stock on April 30, 2004 was $0.67 per share; consequently, the market values for
the Company's total listed securities and publicly held shares were $6,479,894
and $781,395, respectively. As of April 30, 2004, the Company failed to evidence
a market value of publicly held shares of at least $1,000,000 for 27 consecutive
trading days.(4)
At the hearing, the Company explained that, although it remained solvent, it
sought bankruptcy protection under Chapter 11 so as to more easily renegotiate
certain unprofitable contracts and costly leases and to convert its existing
debt into equity. On April 26, 2004, the Company filed its "Plan of
Reorganization and Disclosure Statement" with the bankruptcy court. Pursuant to
the plan, the Company will eliminate its outstanding indebtedness via the
issuance of 7,000,000 shares of newly issued common stock to its unsecured
creditors (the sole creditor class) and other stakeholders. The Company
represented at the hearing that, subsequent to its emergence from bankruptcy,
its current common shareholders will retain a 21%-28% interest in the
reorganized entity. The Company anticipates a hearing on the Disclosure
Statement within 30 days of the April 26th filing date and a hearing to obtain
confirmation for the plan within thirty days thereafter. As indicated at the
hearing, the Company continues to believe that it will emerge from bankruptcy on
or about June 30, 2004.
The Company expects to satisfy all requirements for continued listing on The
Nasdaq SmallCap Market upon its emergence from bankruptcy, including the $1.00
bid price, 500,000 publicly held shares, and $1,000,000 market value of publicly
held shares requirements. By submission dated April 26, 2004, the Company
reiterated its belief that consummation of the plan of reorganization will
enable it to evidence compliance with the minimum bid price requirement as it
anticipates a valuation of $5.00 per common share, post-reorganization. The
Company requested that the Panel grant it a 180-day period within which to
remedy the bid price deficiency in accordance with Marketplace Rule
4310(c)(8)(D).
PANEL DECISION
Notwithstanding the Company's recent bankruptcy filing, the Panel was of the
opinion that the public interest and the protection of investors would be served
by the continued designation of the Company's securities on The Nasdaq SmallCap
Market. The Panel acknowledged the Company's expectation that it will emerge
from bankruptcy within the near term, on or about June 30, 2004. More
importantly, the Panel noted that, under the plan of reorganization, it appears
the Company's current common shareholders will retain a relatively significant
stake in the reorganized entity. The Panel also noted that the Company currently
complies will all requirements for continued listing on The Nasdaq SmallCap
Market, but for the bid price, and expects to sustain compliance with the
maintenance criteria throughout the restructuring process. With respect to the
bid price deficiency, the Panel determined that the Company should be granted a
180-day period within which to satisfy the $1.00 bid price requirement in
accordance
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(3) The Forms 10-K for the fiscal years ended August 31, 2003 and 2002, and
December 31, 2001 reported net income (loss) of $(16,020,000), $(9,778,000) and
$34,811,000 respectively.
(4) See Marketplace Rules 4310(c)(7) and 4310(c)(8)(B).
with Marketplace Rule 4310(c)(8)(D). The Panel also determined that, although
the Company has not evidenced a market value of publicly held shares of at least
$1,000,000 for the past 27 consecutive business days, it is not yet deficient
with respect to that standard as it has not failed the minimum standard for the
requisite 30-day period.
BASED ON THE FORGOING, THE PANEL DETERMINED TO CONTINUE THE LISTING OF THE
COMPANY'S SECURITIES ON THE NASDAQ SMALLCAP MARKET PURSUANT TO THE FOLLOWING
EXCEPTION:
ON OR BEFORE MAY 28, 2004, THE COMPANY MUST SUBMIT DOCUMENTATION TO
NASDAQ EVIDENCING THAT A HEARING BEFORE THE BANKRUPTCY COURT WAS HELD
IN CONNECTION WITH THE DISCLOSURE STATEMENT FILED WITH THAT COURT ON
APRIL 26, 2004. IN ADDITION, ON OR BEFORE JUNE 30, 2004, THE COMPANY
MUST SUBMIT DOCUMENTATION TO NASDAQ EVIDENCING CONFIRMATION OF THE PLAN
OF REORGANIZATION BY THE BANKRUPTCY COURT, THE COMPANY'S EMERGENCE FROM
BANKRUPTCY AS WELL AS THE COMPANY'S COMPLIANCE WITH ALL REQUIREMENTS
FOR CONTINUED LISTING ON THE NASDAQ SMALLCAP MARKET, BUT FOR THOSE
DEFICIENCIES FOR WHICH THE COMPANY HAS BEEN GRANTED A "GRACE" PERIOD
WITHIN WHICH TO REGAIN COMPLIANCE.
IN ORDER TO FULLY COMPLY WITH THE TERMS OF THIS EXCEPTION, THE COMPANY MUST BE
ABLE TO DEMONSTRATE COMPLIANCE WITH ALL REQUIREMENTS FOR CONTINUED LISTING ON
THE NASDAQ SMALLCAP MARKET. IN THE EVENT THE COMPANY FAILS TO COMPLY WITH ALL OF
THE TERMS OF THIS EXCEPTION, ITS SECURITIES WILL BE DELISTED FROM THE NASDAQ
STOCK MARKET.(5)
It is a requirement during the exception period that the Company provide prompt
notification of any significant events that occur during this time. This
includes, but is not limited to, any event that may call into question the
Company's historical financial information or that may impact the Company's
ability to maintain compliance with any Nasdaq listing requirement. The Panel
reserves the right to reconsider the terms of this exception based on any event,
condition, or circumstance that exists or develops that would, in the opinion of
the Panel, make continued listing of the Company's securities on The Nasdaq
Stock Market inadvisable or unwarranted. In addition, any compliance document
will be subject to review by the Panel, which may, in its discretion, request
additional information before determining that the Company has complied with the
terms of the exception.
In addition, all companies operating under exceptions are required to issue a
press release announcing the conditional listing on The Nasdaq SmallCap Market
and are identified by a fifth character "C" appended to the Company's trading
symbol (see sample attached). ACCORDINGLY, EFFECTIVE WITH THE OPEN OF BUSINESS
ON MAY 5, 2004, THE TRADING SYMBOL FOR THE COMPANY'S SECURITIES WILL BE CHANGED
FROM MNPLQ TO MNPQC. The forth character "Q" will remain appended to the
Company's symbol pending the Company's emergence from bankruptcy. The fifth
character "C" will be removed from the symbol upon confirmation of the Company's
compliance with the terms of the exception and all other criteria for continued
listing.
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(5) The Panel's determination is limited to those findings expressly set forth
in this decision, which is based solely upon the facts and circumstances of this
matter and should not be interpreted as precedent.
The Company should be aware that the Nasdaq Listing and Hearing Review Council
(the "Listing Council") may, on its own motion, determine to review any Panel
decision within 45 calendar days after issuance of the written decision. If the
Listing Council determines to review this decision, it may affirm, modify,
reverse, dismiss, or remand the decision to the Panel. The Company will be
immediately notified in the event the Listing Council determines that this
matter will be called for review.
The Company may also request that the Listing 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 for review and a copy of the check must be made
in writing and faxed to (301) 912-3199, with the original sent to:
Mr. Timothy J. Larkin
Counsel
Office of Appeals and Review
The Nasdaq Stock Market, Inc.
1801 K Street, NW
Washington, D.C. 20006
Mr. Larkin can be reached at (202) 912-3021.
Pursuant to Nasdaq Marketplace Rule 4840(b), the Company must submit a fee of
$4,000.00 to The Nasdaq Stock Market, Inc. to cover the cost of the review. The
Company should send only its payment with the enclosed Appeal Fee Payment Form
to:
Regular Mail(6) Courier/Overnight
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The Nasdaq Stock Market, Inc. The Nasdaq Stock Market, Inc.
P.O. Box 7777-W0435 or W0435
Philadelphia, PA 19175-0435 C/O Mellon Bank, Rm 3490
701 Market Street
Philadelphia, PA 19106
Please be advised that the institution of a review, whether by way of the
Company's request or on the initiative of the Listing Council, will not operate
as a stay of this decision.
Should you have any questions, please do not hesitate to contact me at (301)
978-8077.
Sincerely,
(x) Katherine M. Roberson
Katherine M. Roberson
Counsel
Nasdaq Listing Qualifications Hearings
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(6) Please note that the P.O. Box address will not accept courier or overnight
deliveries.