Glowpoint Securities to be Delisted
October 05 2005 - 8:31AM
Business Wire
Glowpoint, Inc. (NASDAQ: GLOWE), has been notified by Nasdaq that
its securities will be delisted from the Nasdaq Stock Market
effective with the open of business on Wednesday, October 5, 2005.
The determination to delist the Company's securities was made
subsequent to a September 15, 2005 hearing before a Nasdaq Listing
Qualifications Panel at which Glowpoint sought a conditional
listing exception. As previously announced, Glowpoint was notified
on August 16, 2005 that it was subject to delisting because the
Company failed to file its Form 10-Q for the quarter ended June 30,
2005 as required by Nasdaq Marketplace Rule 4310(c)(14). On August
3, 2005, Glowpoint announced that it had determined that it was
necessary to restate its financial statements for the years ended
December 31, 2002, 2003 and 2004 (and the related quarters) and for
the quarter ended March 31, 2005, and that it would be unable to
file its Form 10-Q for the quarter ended June 30, 2005 on a timely
basis. In denying the Company's request for the conditional listing
exception, the Nasdaq Panel concluded that Glowpoint had not
presented a definitive plan of compliance with respect to the
re-auditing of its historical financial statements that would
satisfy its current reporting obligations and bring its filings
current. Glowpoint is unable at this time to provide a definitive
timeline as to when the restatements will be completed and when its
SEC filings will be brought current, but the Company is working
diligently with its independent auditors and the Audit Committee to
complete the restatement process as soon as possible. Glowpoint is
considering whether to appeal the Panel's delisting decision to the
Nasdaq Listing and Hearing Review Council. Any such appeal must be
filed within 15 days from the date of the Panel's decision;
however, the filing of an appeal will not stay the delisting
decision. Following the removal from Nasdaq, the Company expects
its common stock to be quoted in the Pink Sheets. Glowpoint also
announced today that its Audit Committee has completed its
investigation of the issues giving rise to the restatement of the
Company's historical financial statements. The Audit Committee
conducted this investigation through its independent counsel and a
forensic audit firm. The investigation found, among other things,
that expenses associated with services provided to and equipment
purchased by customers during 2001 through 2003 were improperly
capitalized as additions to the Company's fixed assets, and that
such practices affected the Company's 2001 through 2004 financial
statements. As previously reported, these transactions principally
relate to activities that occurred when the Company was primarily a
reseller of video conferencing equipment. The Audit Committee
investigation also found that, during the same period, some of the
amounts associated with the practices described above were
addressed or written off in subsequent accounting entries that were
themselves improper, and that similarly improper additions to the
Company's fixed assets continued even after such write-offs had
occurred. The Company's prior Chief Financial Officer, who
participated in these practices and under whose supervision they
occurred, left the Company in April 2005 after the planned
relocation of the finance department from New Hampshire to the
Company's headquarters in New Jersey was completed. In addition to
issues affecting the Company's fixed assets, the investigation
found that during the relevant period the Company lacked adequate
internal accounting controls. The investigation further found that
the Company's current management had since helped to institute
improved internal accounting controls. The Company's current
management continues to address these matters. Finally, the
investigation identified certain areas that warrant further
scrutiny by the Company, including the Company's past revenue
recognition practices when the Company was a reseller of video
conferencing equipment. The equipment resale business was sold in
September 2003. About Glowpoint Glowpoint, Inc. is the world's
leading broadcast quality, IP-based video communications service
provider. Glowpoint operates a video communications service
featuring broadcast quality images with telephone-like reliability,
features and ease-of-use and is a member of the Cisco Powered
Network Program and Covad Partner Program. The Glowpoint network
spans four continents and carries on average over 20,000 video
calls per month worldwide. Since the network was introduced in
2000, Glowpoint has carried over 23 million IP video minutes.
Glowpoint is headquartered in Hillside, New Jersey. To learn more
about Glowpoint, visit www.Glowpoint.com. About Pink Sheets LLC
Pink Sheets provides broker-dealers, issuers and investors with
electronic and print products and information services designed to
improve the transparency of the over-the-counter (OTC) markets. The
products are designed to increase the efficiency of OTC markets,
leading to greater liquidity and investor interest in OTC
securities. Pink Sheets' centralized information network is a
source of competitive market maker quotations, historical prices
and corporate information about OTC issues and issuers. Pink Sheets
is neither an SEC-Registered Stock Exchange nor a NASD
Broker/Dealer. Investors must contact a NASD Broker/Dealer to trade
in a security quoted on the Pink Sheets. Pink Sheets LLC is a
privately owned company headquartered in New York City. More
information is available at http://www.pinksheets.com. Caution
Regarding Forward-Looking Statements This press release contains
forward-looking statements within the meaning of section 21E of the
Securities Exchange Act of 1934, as amended, that reflect
Glowpoint's judgment and involve risks and uncertainties as of the
date of this release. These statements include those related to the
completion of the restatement and re-audit of the historical
financial statements, the filing of delinquent reports on Form
10-Q, the trading of the Company's common stock in the Pink Sheets,
the possibility or success of an appeal to the Nasdaq Listing and
Hearing Review Council, and any other expectations or anticipated
events. Actual events or results may differ materially from
Glowpoint's expectations. There can be no assurance as to when the
restatement of annual or quarterly financial results, the re-audit
of annual and review of quarterly financial statements or the
filing of Form 10-Q will be completed, that the circumstance of the
restatement will not result in a finding of a material weakness in
the Company's internal control over financial reporting, that other
accounting errors or control deficiencies which individually or in
the aggregate constitute a material weakness, will not be
identified during the restatement and re-audit of the historical
financial statements, or that adjustments for other periods will
not be required. Glowpoint disclaims any intent or obligation to
update these forward-looking statements beyond the date of this
release.
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