Struggling electric drive systems company Enova Systems Inc. received notice on 5 July from the NYSE MKT indicating that the company no longer complies with the Exchange’s continued listing standards, and that its securities are subject to being delisted.
By a series of letters, the Exchange previously notified Enova that it was not in compliance with the following sections of the Company Guide: (a) Section 1003(a)(iii) insofar as the Company reported stockholders’ equity of less than $6,000,000 and has incurred losses from continuing operations and/or net losses in five consecutive fiscal years; (b) Section 1003(a)(ii) insofar as the Company reported stockholders’ equity of less than $4,000,000 and has incurred losses from continuing operations and/or net losses in three out of its four most recent fiscal years; and (c) Section 1003(f)(v) insofar as its Common Stock has been trading at a low price per share for a significant period of time.
On 17 May 2012, Enova submitted a plan of compliance advising the Exchange of actions the Company would take to regain compliance with Section 1003(a)(iii) and 1003(a)(ii) of the Company Guide by October 15, 2013. The July Notice stated that the financial projections provided in connection with the Plan did not demonstrate an ability to regain compliance with the minimum requirements by October 15, 2013. The July Notice further stated that, on June 25, 2012, the company notified the Exchange that the financial projections provided with the Plan were no longer accurate and did not provide the staff of the Exchange with updated projections.
In June 2012, the Company filed a Form 8-K disclosing the resignation of Chief Executive Officer and Director Michael Staran, Chief Operating Officer John Mullins and Director Rich Davies, reinforcing the Exchange staff’s conclusion that the Company will be unable to regain compliance by 15 October 2013. (Earlier post.)
Exchange staff advised Enova that the Exchange did not accept the proposed plan and that the company is therefore subject to delisting. The company has a limited right to appeal the determination of the Staff by requesting, on or before 12 July 2012, a hearing with the Listing Qualifications Panel. Enova siad it intends to exercise its right of appeal. There is no assurance that the request for continued listing will be granted.