We Could Lose Our Nasdaq National Market Listing
We may not be able to sustain compliance with certain maintenance criteria
that we are required to satisfy in order for our common stock to remain listed
on the Nasdaq National Market. Our failure to satisfy such criteria, including
the minimum $4 million net tangible asset and $1.00 stock price requirements,
could result in the delisting of our common stock from such market. Our
recurring losses and volatile stock price have from time to time caused us to
fail to satisfy certain criteria. In January 1999, we successfully appealed a
notice of non-compliance from Nasdaq that we received based on our temporary
failure to satisfy the minimum net tangible asset requirement. Termination of
listing of the common stock would likely have a material adverse effect on the
market price and liquidity of the common stock, and on our ability to raise
additional capital. Delisting could also jeopardize certain secondary trading
exemptions from state "blue sky" laws, further affecting liquidity of the common
stock. In addition, we would be liable for substantial monetary penalties to the
holders of the preferred stock in the event of such a termination of listing.
Our failure to pay such penalties could also result in redemption of the
preferred stock.
We May Not Have Sufficient Capital If We Are Required to Redeem the Outstanding
Preferred Stock
Under certain circumstances, we could be required to redeem a total of
2,500 shares of Series D, E and F preferred stock that are currently
outstanding, with a total stated value of $2,500,000. If we are required to
redeem the preferred stock, we may not have sufficient cash available to effect
the redemption. The holders of the outstanding preferred stock have the right
to require us to redeem their shares of preferred stock for cash, at 120% of
stated value, plus accrued dividends, if any of the following happens:
. our board agrees to sell the company or the Be There! product line to
another company, or our board consents to the tender offer of our shares
by another company;
. this registration statement is not declared effective by the SEC before
May 16, 1999;
. this registration statement can not be used to permit the sale of the
shares issuable upon conversion of the preferred stock;
. we voluntarily terminate the listing of our shares on the Nasdaq
National Market;
. we fail to deliver shares of common stock upon conversion of the
preferred stock; or . we file for bankruptcy.
In addition, if our common stock is delisted from the Nasdaq National
Market, and we fail to pay required penalties to the holders of the preferred
stock, then the holders of the preferred stock can require us to redeem their
shares of preferred stock. If we are required to redeem the preferred stock, we
would most likely be forced to attempt to quickly find other sources of
financing. If we could find such financing at all, it is not likely that such
financing would be on favorable terms. The inability to find financing or the
terms of such unfavorable financing and our resulting lack of liquidity could
force us to discontinue portions or all of our operations. |
