KIT digital to Change Auditors and Announces Delisting From NASDAQ
The Company is in the process of engaging a new audit firm and anticipates an announcement about the appointment of a new auditor in the near future.
As previously disclosed, KIT digital is undertaking a restatement of the Company's historical financial statements for the years ended December 31, 2009, 2010 and 2011, each of the three quarters in 2009, 2010 and 2011, and each of the quarters ended March 31, 2012 and June 30, 2012. The restatement, once completed, will be subject to audit by the Company's independent public accounting firm.
Additionally, the Company announced today that its common stock would be delisted from The NASDAQ Stock Market effective at the opening of business on December 21, 2012. Trading of the Company's common stock is currently subject to a trading halt, which the Company does not expect to be lifted prior to the delisting of the common stock. The delisting is precipitated by the Company's determination not to pay certain fees based on its current circumstances and outlook, which include: (1) the previously disclosed listing violation for its failure to timely file its third quarter Form 10-Q, (2) likely delisting in early 2013 due to failure to hold a 2012 annual meeting, and (3) the possible failure to become compliant in SEC reporting in sufficient time to avoid delisting. The Company does not intend to request an appeal hearing regarding NASDAQ's delisting determination.
The Company currently intends to submit an application in order for the Company's common stock to be listed on the OTC Pink Sheets/OTC Pink Marketplace, including submission of a Financial Industry Regulatory Authority ("FINRA") Form 211. The Company's common stock would begin trading on the OTC Pink Sheets/OTC Pink Marketplace following approval by FINRA's OTC Compliance Unit of the Company's Form 211 and at least one market maker deciding to quote the Company's common stock. The OTC Pink Sheets/OTC Pink Marketplace is a market tier operated by the OTC Market Group Inc. for over-the-counter traded companies. The delisting and transition to the OTC Pink Sheets/OTC Pink Marketplace does not change the Company's obligations to file periodic and other periodic reports with the SEC under applicable federal securities laws. There is no assurance that the OTC Compliance Unit will approve the Company's Form 211 in view of the pending restatement of the Company's financial statements or that any market maker will decide to quote the Company's common stock following delisting by NASDAQ or at all, and thus there is no assurance that the Company's common stock will become eligible to trade on the OTC Pink Sheets/OTC Pink Marketplace.
Important Caution Regarding Forward-Looking Statements
This release contains certain "forward-looking statements." These statements can be identified by the use of words or phrases such as "believes," "estimates," "expects," "intends," "anticipates," "projects," "plans" and variations of these words or similar words. Important risks, uncertainties and other important factors that could cause actual results to differ materially include, among others, the risk that additional information may become available in preparing and auditing the financial statements that would require the Company to make additional corrections, the time and effort required to complete the restatement of the financial statements, the ramifications of the Company's inability to timely file periodic and other reports with the SEC, including the risk that the Company's common stock will not be eligible to trade on the OTC Pink Sheets/OTC Pink Marketplace or that the Company determines not to seek to make the shares of common stock eligible to trade on the OTC Pink Sheets/OTC Pink Marketplace, the risk of engaging a new audit firm and the terms thereof, and the risk of litigation or governmental investigations or proceedings relating to these matters. Certain risks and uncertainties related to the Company's business are or will be described in greater detail in the Company's filings with the SEC. Except as required by applicable law, the Company is not under obligation to (and expressly disclaims any such obligation to) update its forward-looking statements whether as a result of new information, future events or otherwise.
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