Nasdaq delisting latest headache for global ePoint.Things seemed to be going well last year for Global ePoint Inc., that was until it got caught up in a wave of Wall Street speculation. The City of Industry-based maker of video recording and onboard aircraft surveillance and entertainment equipment had a slew of distribution deals lined up with the likes of Deutsche Lufthansa, American Airlines American Airlines Major U.S. airline. American was created through a merger of several smaller U.S. airlines and incorporated in 1934. It continued to buy the routes of other airlines, becoming an international carrier in the 1970s; its routes include South America, the and International Lease Finance Corp., one of the world's largest leasers of aircraft. Moreover, the Federal Aviation Administration Federal Aviation Administration (FAA), component of the U.S. Department of Transportation that sets standards for the air-worthiness of all civilian aircraft, inspects and licenses them, and regulates civilian and military air traffic through its air traffic control was poised to join the International Civil Aviation Organization International Civil Aviation Organization (ICAO), specialized agency of the United Nations, organized in 1947, with headquarters at Montreal. The objective of the ICAO, which has 187 member nations, is to encourage the orderly growth of international civil aviation, and Europe's version of the FAA in mandating cockpit surveillance equipment--a product Global ePoint specializes in making. So with money seemingly ready to pour into the company and its sector, its shares surged from $3.02 on July 1, 2005 to $7.03 one month later. Eager investors had jumped on board for what would turn out to be quite a bumpy bump·y adj. bump·i·er, bump·i·est 1. Covered with or full of bumps: a bumpy country road. 2. Marked by bumps and jolts; rough: a bumpy flight. fide. Given that the company had not earned a profit since 2002, Global ePoint was in need of capital to fund its growth and issued Series C and D preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. in June of last year. Shortly thereafter, the company decided to issue another round of Series E preferred stock to the same investors, raising more than $8 million in total. "We are poised to take advantage of the market opportunities that will be presented by the expected release of mandates both by the (FAA), and European aviation regulatory authorities," the company said in a regulatory filling on May 25 of this year. "The FAA estimates that the market for (cockpit door surveillance systems) is $185 million in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and we believe the international market to be larger than that." Instead, the company got hit with a Nasdaq notification that it did not comply with exchange rules requiring share holders to be notified of the preferred stock offerings--a mandate anytime an offering totals more than 20 percent of market cap. Last week, its problems culminated in the company being delisted from the Nasdaq, though with combined losses of more than $13 million over the past three years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time company was in danger of being delisted on its financial performance alone. "Clearly our lawyers didn't think it would be this way," said company Chairman Johnny Pan, who in an interview in early June called the preferred stock notification violation a "petty misdemeanor." "For whatever reason (Nasdaq) wanted to make an example of us. As far as I know, we're the first company to get this kind of penalty." Eighty-five companies were delisted last year from Nasdaq, with 36 of those due to regulatory violations. Most of those end up trading over the counter. And that's exactly what ePoint plans to do, though it also has appealed the delisting Delisting When the stock of a company is removed from a stock exchange. Notes: Reasons for delisting include violating regulations and/or failure to meet financial specifications set out by the stock exchange. decision and should know the result of its appeal by Oct. 2. Currently, the company's shares are being traded on the Pink Sheets and have hovered between 70 and 80 cents. "It just an unfortunate situation all around for the company," said Rob Steinberg, a partner at Jeffer, Mangels mangels Beta vulgaris; called also mangel-wurzel. , Buter & Marmaro, who is familiar with the company. "There isn't much else they can do but carry on and use the experience as a lesson learned." |
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