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Seven Arts Entertainment Provides Update on Common Stock Trading Halt by NASDAQ(July 11, 2012)
LOS ANGELES, CA -- (Marketwire) -- 07/11/12 -- Seven Arts Entertainment Inc. (the "Company" or "Seven Arts") was advised on Monday morning, July 9th, that The NASDAQ Stock Market ("NASDAQ") intended to implement a trading halt in the Company's common stock "pending the receipt of additional information requested." The trading halt was subsequently implemented during the Monday trading session. The Company was also advised that the staff of the NASDAQ Listing Qualifications Department (the "Staff") intends to initiate proceedings to delist the Company's common stock from The NASDAQ Capital Market and that a letter setting forth the bases for the delisting determination would be issued to the Company within the next several days. Finally, the Company was advised that it will have the right to request a review of Staff's delisting determination by an independent NASDAQ Listing Qualifications Panel (the "Panel") and that a request for a hearing before the Panel would stay the delisting pending the issuance of a decision by the Panel following the hearing.
As the Company understands it, the Staff has concluded that the Company failed to comply with the NASDAQ Listing Rules in several respects. As noted in a Current Report on Form 8-K filed by the Company with the U.S. Securities and Exchange Commission earlier today, in a letter dated July 3, 2012, the Staff stated that the issuance by the Company of 50,000 shares of Series B Preferred Stock (the "preferred stock") in connection with the acquisition of certain assets did not comply with NASDAQ's voting rights rule for reasons set forth more fully in the Form 8-K filing. In addition, the Staff indicated that the preferred stock issuance did not comply with the NASDAQ shareholder approval rules in that the preferred stock was issued in connection with the acquisition of certain assets and could potentially result in an issuance exceeding 20% of the pre-transaction common shares outstanding.
In addition to the foregoing, the Staff has raised questions concerning the Proxy Statement disclosure and whether certain shares of Class B Preferred Stock were properly voted at the Company's stockholder meeting, which was held on March 27, 2012. Further, the Staff has indicated that it intends to cite the Company for failing to timely file the listing of additional shares form with NASDAQ for the preferred stock issuance and for failing to timely provide information requested by the Staff in connection with the listing of additional shares filing. Further, the Staff has indicated that an LAS filing is due for shares issued in connection with a separate acquisition, which closed in March 2012.
The Company intends to provide additional disclosure relating to the Staff's concerns promptly following the receipt of the Staff's delisting determination. Also, the Company disagrees with certain of the Staff's conclusions and plans to provide additional information to NASDAQ in an effort to address any misunderstandings. The Company further intends to ask the Panel to review the Staff's determination and plans to take all necessary and appropriate steps to address the concerns raised by the Staff.
Finally, the Company expects that the NASDAQ trading halt will be lifted for pre-market trading (approximately 7:15am EDT) on July 12, 2012. Notwithstanding, the Company cannot provide any assurances that the Panel will not determine to delist the Company's common shares following the hearing.
About Seven Arts Entertainment Inc.:
Seven Arts Entertainment Inc. is the successor to Seven Arts Pictures Plc, which was founded in 2002 as an independent motion picture production and distribution company engaged in the development, acquisition, financing, production and licensing of theatrical motion pictures for exhibition in domestic (i.e., the United States and Canada) and foreign theatrical markets, and for subsequent worldwide release in other forms of media, including home video and pay and free television.
Cautionary Information Regarding Forward-Looking Statements.
Forward-looking statements contained in this press release are made under the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from the anticipated.
These risks and uncertainties include, but are not limited to, those relating to production and financing activities, dependence on existing management, and domestic and global economic conditions. Persons are encouraged to read the Company's periodic reports as filed with the Securities and Exchange Commission for meaningful cautionary language in respect of forward-looking statements in this press release. Interested persons are able to obtain free copies of those filings at the SEC's internet site (http://www.sec.gov). The Company does not assume any obligation to update any of these forward-looking statements.
Seven Arts Entertainment Inc.
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