POSSIBLE DELISTING OF SHARES FROM THE NASDAQ SMALL CAP MARKET;
RISKS RELATING TO LOW-PRICED STOCKS
The Ordinary Shares are quoted on The Nasdaq SmallCap Market as of the date
of this Prospectus. In order to continue to meet The Nasdaq SmallCap Market's
maintenance requirements, however, the Company must maintain $2,000,000 in total
assets, a $200,000 market of the public float, $1,000,000 in total capital and
surplus, and a minimum bid price of $1.00.
The Company has received a notice from Nasdaq Market Services indicating
that, in light of the Company's failure to meet the $1,000,000 in capital and
surplus as reflected in the Company's financial results for the quarter ended
September 30, 1996, the Company no longer meets the requirements to have its
Ordinary Shares quoted on the Nasdaq SmallCap Market. The Company intends to
request an oral hearing for a temporary exception to the provision requiring the
delisting of the Ordinary Shares. The Company believes that, based upon the
receipt of the net proceeds of the Offering, the Company will meet the capital
and surplus requirements and will avoid such delisting. No assurance, however,
can be given that the Company's Ordinary Shares will not be delisted from the
Nasdaq SmallCap Market.
In addition, if the Company's securities were to become delisted from
trading on The Nasdaq SmallCap Market and the trading price of such securities
were to fall below $5.00 per share or per unit, trading in such securities would
also be subject to the requirements of certain rules promulgated under the
Exchange Act, which require additional disclosure by broker-dealers in
connection with any trades involving a stock defined as a penny stock
(generally, any non-Nasdaq equity security that has a market price of less than
$5.00 per share, subject to certain exceptions). Such rules require the
delivery, prior to any penny stock transaction, of a disclosure schedule
explaining the penny stock market and the risks associated therewith, and impose
various sales practice requirements on broker-dealers who sell penny stock to
persons other than established customers and accredited investors (generally
institutions). For these types of transactions, the broker-dealer must make a
special suitability determination for the purchase and have received the
purchaser's written consent to the transaction prior to sale. The additional
burdens imposed upon broker-dealers by such requirements may discourage
broker-dealers from effecting transactions in the Units or the Ordinary Shares
which could severely limit the market liquidity of the Units or the Ordinary
Shares and the ability of purchasers in this offering to sell their Units or
their Ordinary Shares in the secondary market.
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The above is an excerpt from the prospectus for the offering.
You can read the entire prospectus on Edgar at sec.gov
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