UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 17, 2006
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COACTIVE MARKETING GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-20394 06-1340408
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification Number)
75 Ninth Avenue, New York, New York 10011
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (212) 660-3800
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2.below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13c-4(c))
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing
Rule or Standard; Transfer of Listing.
On November 21, 2006, CoActive Marketing Group, Inc. (the "Company")
received a Nasdaq Staff Determination letter stating that the Company is not in
compliance with the requirements for continued listing as set forth in Nasdaq
Marketplace Rule 4310(c)(14) because of the Company's failure to timely file its
Quarterly Report on Form 10-Q for the period ended September 30, 2006.
Accordingly, the Nasdaq Staff Determination letter indicated that the
Company's securities are subject to delisting from the Nasdaq Capital Market
unless the Company requests a hearing before a Nasdaq Listing Qualifications
Panel (the "Panel"). The Company intends to timely request a hearing to review
the Staff Determination which will automatically stay the delisting and allow
the Company's common stock to continue trading on Nasdaq under its symbol CMKG,
pending the hearing and a decision by the Panel. There can be no assurance that
the Panel will grant the Company's request for continued listing as a result of
the hearing.
Item 4.02. Non-Reliance on Previously Issued Financial Statements or a
Related Audit Report or Completed Interim Review.
On November 17, 2006, the Audit Committee of the Board of Directors of
the Company concluded, following discussions with the Company's management and
independent registered public accounting firm, that the Company's audited
consolidated financial statements as of and for the fiscal year ended March 31,
2006, and unaudited interim consolidated financial statements as of and for the
quarterly period ended June 30, 2006, should no longer be relied upon and will
need to restated. In addition, management is currently assessing whether the
Company's consolidated financial statements as of and for its fiscal years ended
March 31, 2005 and 2004 will also need to be restated.
As previously reported, the Company recently retained a new independent
registered public accounting firm. In connection with its review of the
Company's financial statement for its third fiscal quarter ended September 30,
2006, this accounting firm communicated to the Company's Audit Committee and
management certain concerns it had regarding the Company's historic financial
statements, as well is its internal controls. The areas of concern include:
o The Company's current and historic monitoring and accounting
for state use tax liabilities in various jurisdictions.
o The revenue recognition policies utilized by the Company
with respect to certain customer contracts, and the
Company's application of such policies.
o Resource constraints faced by the Company's accounting
department.
o Excessive reliance on Excel spreadsheets by the Company in
key areas, including as support for revenue recognition on
certain customer contracts.
o Insufficient controls in monitoring and controlling the
posting of journal entries.
At this point, the Company is unable to determine with specificity the
adjustments to its previously issued financial statements. However, as a general
matter, the Company believes that adjustments to such financial statements will
result in a decrease in net income from that previously reported for its fiscal
year ended March 31, 2006, and an increase in net income for its quarter ended
June 30, 2006. In addition, with respect to revenues, the Company believes that
any downward adjustment to previously reported revenues will result in a
corresponding increase in revenues for subsequent periods.
The Company will need additional time to review the matters described
above, and in addition, will need to work with its former independent registered
public accounting firm to file amended Forms 10-Q and 10-K before it will be
able to file its Quarterly Report on Form 10-Q for its second quarter ended
September 30, 2006. Accordingly, although the Company intends to make these
filings and become current in its reporting obligations under the Securities
Exchange Act of 1934, as amended, as soon as practicable, the Company can not
currently predict when it will be able to do so.
The Company believes that any errors in prior financial statement were
inadvertent and unintentional. In addition, the Company has commenced the
process of implementing procedures to strengthen its internal control processes
and prevent a recurrence of future errors.
The Company's Audit Committee has discussed the matters disclosed in
this Item 4.02 with its independent registered public accounting firm.
SIGNATURES
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Pursuant to the requirements of 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.
Date: November 21, 2006
COACTIVE MARKETING GROUP, INC.
By: /s/ ERWIN MEVORAH
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Erwin Mevorah,
Chief Financial Officer