Nov 11 2009
Craftmade International, Inc. (Nasdaq: CRFT) (the "Company") today announced that it has notified the NASDAQ Stock Market ("Nasdaq") of its intent to voluntarily delist its common stock from the NASDAQ Global Market. The Company also intends to subsequently deregister its common stock with the SEC and suspend its reporting obligations under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company expects that its shares will continue to trade under the "CRFT" ticker symbol (OTCQX: CRFT).
Craftmade is delisting from Nasdaq and deregistering with the SEC as part its ongoing efforts to reduce expenses and improve financial results. The Company intends to move its common stock listing to OTCQX, the premier tier of the U.S. over-the-counter market, operated by Pink OTC Markets Inc. Pink OTC Markets reports that small companies typically save $500,000 to $750,000 annually by moving their listing from a national exchange and deregistering under the Exchange Act. Craftmade anticipates realizing annual savings at the high end of this range, without compromising the trustworthiness of its financial disclosures or the trading liquidity of its shares. The Company also expects that this change will free up considerable time for management to focus on Craftmade's strategy and operating performance
Among other savings, the Company will no longer bear the significant financial burden of complying with the Sarbanes-Oxley Act of 2002, which would otherwise be increasing in the current fiscal year. Current regulations now require smaller reporting companies to obtain auditor attestation on the effectiveness of the company's internal controls for fiscal years ending after June 15, 2010. The Company also expects significant savings related to legal and auditor reviews of SEC disclosures, as well as accounting and other administrative fees related to the Company's Nasdaq listing and SEC reporting requirements.
The Company chose the OTCQX marketplace because it requires member companies to adhere to a rigorous set of financial disclosures. Specifically, OTCQX-listed issuers are required to publicly disclose annual audited financial statements, unaudited quarterly financial statements and current information pertaining to material events and trading by insiders. The Company believes that these disclosures, which will be reviewed by a reputable investment bank sponsor, will provide its shareholders with the ability to monitor the Company's progress and make informed investment decisions. In addition, the Company currently intends to continue to hold annual meetings of stockholders.
"Craftmade has been looking closely at all aspects of its operations in recent months, and has made many changes to create the most efficient business possible during these difficult economic times," commented J. Marcus Scrudder, Craftmade's Chief Executive Officer. "We're taking this important step with our shareholders' interests in mind. The burden of reporting under the Exchange Act and in recent years the added burden of Sarbanes-Oxley have become too much for many small companies like Craftmade. After careful consideration, the Company believes that by moving its stock listing to OTCQX, it can re-invest significant resources to help drive growth and profitability. We believe that by utilizing the OTCQX platform, material savings can be achieved while still providing reliable information to our shareholders. We were very excited to learn that other companies who have moved to OTCQX have seen only a slight reduction in trading volume and little impact on share value."
Management will further address the Company's decision to move its listing to OTCQX in conjunction with its Fiscal First Quarter 2010 earnings conference call, tentatively planned for Thursday, November 12 at 11:00 a.m. ET. Conference call details will be provided prior to that time.
Source: http://www.craftmade.com/