Image Entertainment Receives Staff Deficiency Letters from The NASDAQ Stock Market
15 1월 2010 - 6:30AM
Business Wire
Image Entertainment, Inc. (NASDAQ: DISK), one of the largest
independent home entertainment distributors in North America and a
leading pioneer of the multi-billion dollar optical disc industry,
reported today that it had received letters from NASDAQ staff on
January 8, 2010 and January 13, 2010 citing various violations
of NASDAQ Listing Rules most of which are related to the Company's
recently concluded $22 million preferred stock financing.
Those violations include Listing Rules 5635(d), 5635(b) and 5640
relating to the issuance of 20% or more of the pre-transaction
shares at a discount to market value and effecting a change in
control of the Company without obtaining shareholder approval, and
the issuance of "super-voting stock." The NASDAQ staff also stated
its belief that the continued listing of the Company, after it
knowingly entered into a transaction in violation of NASDAQ's
shareholder approval and voting rights rules, raises public
interest concerns under Listing Rule 5101 and in that regard, the
continued listing of the Company would erode public confidence in
NASDAQ. The NASDAQ staff also notified the Company that its current
board of directors that was elected immediately after the closing
of the preferred stock financing does not contain any independent
directors as defined in Listing Rule 5605(a)(2). As a result, the
Company is in violation of Listing Rules 5605(b)(1), which requires
a majority of independent directors; 5605(c)(2)(A), which requires
an audit committee of three independent directors; 5605(d), which
requires determination of executive compensation by independent
directors; and 5605(e), which requires nomination of directors by
independent directors.
As previously announced, the Company is appealing a notice of
delisting from The NASDAQ Global Market. The NASDAQ staff noted
that the Company's recent violations will be considered by the
Hearings Panel in rendering a determination regarding the continued
listing of the Company's stock on The NASDAQ Global Market.
The NASDAQ staff also noted that, as previously reported in a
Form 8-K filed with the Securities and Exchange Commission, for
approximately 30 days the Company's audit committee consisted of
only two directors, in violation of Listing Rule 5605(c)(2)(A).
That violation has been cured although as discussed above the
current audit committee does not comply with Listing Rule
5605(c)(2)(A).
About Image
Entertainment
Image Entertainment, Inc. is a leading independent licensee and
distributor of entertainment programming in North America, with
approximately 3,200 exclusive DVD titles and approximately 340
exclusive CD titles in domestic release and approximately 400
programs internationally via sublicense agreements. For many of its
titles, the Company has exclusive audio and broadcast rights and,
through its subsidiary, Egami Media, Inc. has digital download
rights to approximately 2,000 video programs and over 300 audio
titles containing more than 5,100 individual tracks. The Company is
headquartered in Chatsworth, California. For more information about
Image Entertainment, Inc., please go to
www.image-entertainment.com.
Forward-Looking
Statements
This press release includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
relating to, among other things, the Company’s NASDAQ listing.
These statements may be identified by the use of words such as
“will,” “may,” “estimate,” “expect,” “intend,” “plan,” “believe,”
and other terms of similar meaning in connection with any
discussion of future operating or financial performance or other
events or developments. All forward-looking statements are based on
management’s current expectations and involve inherent risks and
uncertainties, including factors that could delay, divert or change
any of them, and could cause actual outcomes and results to differ
materially from current expectations.
These factors include, but are not limited to, (a) the Company's
ability to continue as a going concern, (b) the Company's ability
to service its principal and interest obligations on its
outstanding debt or otherwise renegotiate or refinance such
outstanding debt, which renegotiation may not be successful and
refinancing may not be available on acceptable terms, if at all,
which may trigger defaults under its other debt agreements, create
liquidity issues, potentially force the Company to file for
protection from its creditors under Chapter 11 of the U.S.
Bankruptcy Code and prevent the Company from continuing as a going
concern, (c) the Company's limited funds and the Company's
inability to raise additional funds on acceptable terms or at all,
(d) the Company's ability to borrow against the Company's revolving
line of credit, (e) the Company's ability to secure media content
on acceptable terms, (f) the Company's DVD manufacturer continuing
to manufacture and fulfill orders to Company customers while the
Company is past due on its payables to such manufacturer, (g) the
ability of the Company to successfully appeal the delisting
determination issued by the Staff of The NASDAQ Stock Market on
December 15, 2009 and the ability of the Company's common stock to
continue trading on The NASDAQ Stock Market, (h) the performance of
business partners upon whom the Company depends upon, (i) changes
in the retail DVD and digital media and entertainment industries,
(j) changing public and consumer taste and changes in customer
spending patterns, (k) decreasing retail shelf space for the
Company's industry, (l) further sales or dilution of the Company's
equity, which may adversely affect the market price of the
Company's common stock, (m) changes in the Company's business plan,
(n) heightened competition, including with respect to pricing,
entry of new competitors, the development of new products by new
and existing competitors, (o) changes in general economic
conditions, including the performance of financial markets and
interest rates, (p) difficult, adverse and volatile conditions in
the global and domestic capital and credit markets, (q) claims that
the Company infringed other parties' intellectual property, (r)
changes in accounting standards, practices or policies, and (s)
adverse results or other consequences from litigation, arbitration
or regulatory investigations.
For further details and a discussion of these and other risks
and uncertainties, see “Forward-Looking Statements” and “Risk
Factors” in the Company’s most recent Annual Report on Form 10-K,
and the Company’s most recent Quarterly Reports on Form 10-Q. Many
of the factors that will determine the outcome of the subject
matter of this press release are beyond Image Entertainment’s
ability to control or predict. Actual results may differ materially
from management's expectations. Unless otherwise required by law,
the Company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events or otherwise.
Image Entertainment (NASDAQ:DISK)
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