CompuMed, Inc. (OTCQB:CMPD)
(http://www.compumed.net) announced today that the Company intends
to voluntarily file a Form 15 with the Securities and Exchange
Commission (SEC) on or about March 25, 2011, to deregister its
common stock and suspend its reporting obligations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
The Company is eligible to deregister by filing a Form 15 because
it has fewer than 500 common stock shareholders of record.
The Company's Board of Directors authorized the deregistration
from the SEC of the Company's common stock. The Board concluded
that the consequences of remaining an SEC-reporting company, which
includes significant costs associated with regulatory compliance,
outweighed the current benefits of public company status. Among the
factors considered were (i) the costs, both direct and indirect,
incurred by the Company each year in connection with the
preparation and filing of periodic reports and forms with the SEC;
(ii) estimated annual savings of approximately $330,000 in audit
and legal fees, Sarbanes-Oxley Section 404 documentation and
testing, Board of Directors fees and public company reporting and
filing fees; (iii) the estimated benefit to EBITDA and net income
or loss as a result of cost savings associated with a reduction in
regulatory filings and Sarbanes-Oxley compliance related matters;
(iv) the benefit of allowing senior management to spend less time
with SEC report and form preparation enabling them to devote
greater attention to the Company's revenue bearing sales and
marketing activities and long-term financial performance; (v) the
reduction in the amount of public information available to
competitors; (vi) the value that the public markets are applying to
the Company; (viii) the lack of institutional investor interest and
analyst coverage; and (ix) the thinly traded nature of the
Company's common stock on the OTCBB that resulted in its stock
being moved to the Pink Sheets. In reaching this decision,
management and the Board of Directors of the Company further
consulted with certain large shareholders, under confidentiality
agreements, to help assess the advantages and disadvantages of such
SEC deregistration.
Maurizio Vecchione, President & CEO, said, "With completion
of the agreement with our strategic partner, concurrently announced
today, we believe our telemedicine business has an opportunity to
scale up significantly. However, doing so will require us to
focus our resources on securing a leadership position in the
marketplace. The deregistering will improve our cash flow, allowing
us to effectively pursue this growth."
Mark Stolper, Chairman of Board of CompuMed, added, "We are
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
substantially increased compliance costs for small companies such
as CompuMed. After careful consideration, the Company
believes that by deregistering its common stock, it will be able to
reallocate significant resources towards improving growth and
profitability. We believe that by utilizing the Pink Sheets
platform, material savings can be achieved while still providing
reliable information to our shareholders."
Additionally, the Board of Directors has authorized a share
repurchase program of up to 100,000 shares of the Company's common
stock. The Company's share repurchase program is subject to certain
market rules and volume limitations. Repurchases may occur
from time to time in the open market or through private
transactions, subject to market conditions, working capital
requirements, general business conditions and other factors,
including alternative investment opportunities.
Upon filing the Form 15, CompuMed's obligation to file certain
reports with the SEC, including Forms 10-KSB, 10-QSB and 8-K, will
immediately be suspended, and accordingly, CompuMed does not intend
to file its Form 10Q with the SEC for the quarter that will end
March 31, 2011.
The Company is committed to providing periodic financial
statements to its shareholders after it suspends its SEC reporting
obligations. The Company plans to post quarterly and year-end
financial statements, consisting of a balance sheet, income
statement, cash flow statement, statement of changes in
shareholders' equity and financial notes on the Company's website
or through the OTC Disclosure and News Service. The Company will
have annual meetings of shareholders and provide notice to
shareholders of such meetings. Finally, the Company will use its
best efforts to ensure that market makers may trade its stock on
the Pink Sheets.
Unrelated to the decision to deregister, effective on or about
February 17th, 2011, the Company had its stock quotation moved from
the OTC Bulletin Board (the "OTCBB") to the OTCQB, a new electronic
interdealer quotation system created by OTC Markets Group, Inc.
(formerly Pink Sheets). The move to the OTCQB was the result of
market makers choosing to shift their orders to the OTCQB in order
to avoid certain OCTBB participation fees. These participation
fees, which are based on the number of positions during a given
month, have made it challenging for market maker firms to maintain
OTCBB markets in a large number of stocks that are thinly
traded.
The result of the market makers shifting their orders to the
OTCQB was that the Company no longer had a sufficient number of
market makers providing quotes on the Company's common stock on the
OTCBB per a continuing listing standard test. As a result, the
Company was deemed to be deficient in maintaining its listing on
the OTCBB pursuant to Rule 15c2-11.
The Company has received a commitment from at least one market
maker that a market will continue to be made on the Pink Sheets
following SEC deregistration. The Company intends to continue to
meet the requirements of a "Current Information" filer under the
Pink Sheets, and as a result, will continue to report quarterly and
annual financial statements as required by the Pink
Sheets. Pink Sheets eligibility requirements do not require
the Company to be a reporting Company with the SEC.
About CompuMed
CompuMed, Inc. (OTCQB:CMPD) develops and markets products and
services that combine advanced imaging with medical informatics.
Its focus is on analysis and remote monitoring for patients with
cardiovascular and musculoskeletal diseases. The company has
specialized expertise and intellectual property in telemedicine,
telemonitoring imaging and analysis designed to improve healthcare
provider workflow and patient care while reducing costs. CompuMed
is headquartered in Los Angeles and distributes its products
worldwide both directly and through OEM partners. Visit CompuMed at
www.compumed.net and follow on Twitter @compumed and on Facebook at
CompuMed, Inc.
Forward Looking Statements
Statements contained in this press release that are not
historical facts, such as statements about prospective earnings,
savings, revenue, operations, revenue and earnings growth, results
of contracts and other financial results, are forward-looking
statements pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. All such forward-looking
statements including statements concerning the Company's plans,
objectives, expectations and intentions are based largely on
management's expectations and are subject to and qualified by risks
and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements.
These statements are subject to uncertainties and risks including,
without limitation, competitive factors, outsourcing trends in the
pharmaceutical industry, product and service demand and acceptance,
changes in technology, ability to raise capital, the availability
of appropriate acquisition candidates and/or business partnerships,
economic conditions, the impact of competition and pricing,
capacity and supply constraints or difficulties, government
regulation and other risks identified in the Company's filings with
the Securities and Exchange Commission including its Annual Report
on Form 10-KSB and Quarterly Reports on Form 10-QSB. All such
forward-looking statements are expressly qualified by these
cautionary statements. The Company expressly disclaims any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements to reflect events,
conditions or circumstances on which any such statement is based
after the date hereof, except as required by law.
CONTACT: Press Contact:
Susan Tellem, APR, RN
Tellem Worldwide
+1 310-313-3444
stellem@tellem.com
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