S.F. Investment Bank Tries to Regain Nasdaq Compliance
December 29, 2009
Merriman Curhan Ford Group, a San Francisco investment banking and securities trading firm, said in a filing Tuesday that it believes it regained compliance with Nasdaq's listing requirements.
The firm said it believed compliance was achieved by removing a “ratchet” provision on warrants it had issued, “which resulted in the company recording a non-cash warrant liability of approximately $26 million.’’
The warrants were created in conjunction with the issuance on September 8 of a series of convertible preferred stock.
As a result of removing the ratchet provision, the firm said it has “ a substantially smaller warrant liability and consequently has stockholders' equity of a magnitude well in excess of that required to meet Nasdaq listing requirements as of this date.”
This will be reflected in the company's Form 10-K for the fiscal year ended December 31, 2009, the company said. As of Monday, the company had binding written agreements from 96% and a verbal consent from the remaining 4% of warrant holders agreeing to remove the ratchet provision.
In its Form 10-Q filed with the SEC on November 16, 2009, the company showed a stockholders' deficit while one of the applicable Nasdaq requirements is a stockholders' equity of at least $2.5 million. The strategic transaction that the company closed on September 8, 2009 resulted in a cash infusion of $10.2 million.
In 2008, the company reported a loss of $30.2 million on revenue of $36.6 million. In its most recent quarter, ending September 30, the company reported a net loss attributable to common shareholders of $21.7 million on revenue of $13.3 million.
