"Bland was president previously of Empyrean Diagnostics Ltd., a Canadian company that regulators said had filing problems and mislead investors. After he left Empyrean in June 1996, the company voluntarily delisted from the Vancouver Stock Exchange and moved to the U.S."
Upgrade Falls Again on Financial, Legal Concerns
Seattle, March 3 (Bloomberg) -- Shares in Upgrade International Corp., whose products let smart cards store more data, fell 61 percent during the past seven trading days on concerns over lawsuits and its finances, the company said.
The shares fell 8 1/8, or 28 percent, to 20 5/8 on the Nasdaq Stock Market. They closed at 53 on Feb. 23. Trading was suspended temporarily today in Germany.
Upgrade has missed a self-imposed deadline to file a Form 10- K, which reports revenue, to the U.S. Securities and Exchange Commission by Feb. 25, ahead of a May regulatory deadline. Lawsuits seeking class-actions status allege that Chief Executive Daniel Bland, the company's biggest individual investor, made false statements about the company, inflating the stock price.
``Lawsuits, negative articles and suspensions are going to have a negative impact on the market until we can develop the business plan,' Bland said in an interview from Blaine, Washington.
``We are concerned that confidence is waning. We have only one way to respond to that, and that is to develop our business.'
Suspended Trading
Investor concern about Upgrade prompted Deutsche Boerse AG, which operates the Frankfurt stock exchange, to suspend trading in Upgrade shares temporarily this morning at the request of broker KJD AG. The stock fell 30 percent today in Germany to 21.10 euros ($20.33).
Smart cards, which are the same size as credit-cards and store more information, are expected to account for $30 billion in industrywide annual sales in a few years compared to $10 billion now, Bland said. Upgrade hasn't reported revenue.
No analysts follow the company.
Bland, also the Seattle-based company's president, would say only that Upgrade International plans to file financial information before the May deadline. He said the lawsuits against the company lacked merit and delayed it from filing documents with the SEC while lawyers review the complaints.
Nothing Wrong
``The allegations in the complaint are completely without fact,' Bland said about one of the cases. ``The company is going to aggressively defend this lawsuit.'
Bland was president previously of Empyrean Diagnostics Ltd., a Canadian company that regulators said had filing problems and mislead investors. After he left Empyrean in June 1996, the company voluntarily delisted from the Vancouver Stock Exchange and moved to the U.S.
Despite the problems facing Upgrade, Bland said he won't resign and hasn't done anything wrong.
Investor speculation on an Internet discussion group that he could resign is ``ridiculous,' he said. ``No one is stepping down.'
Shares of Upgrade began to slide on Feb. 14 after a story in Barron's said the stock is overvalued because the company won't have a product out until next year at the soonest, and because its stock has risen 22-fold increase in price during the past year. Upgrade fell 28 1/16 to 34 15/16 that day.
Mar/03/2000 16:45 |
