eLinear Responds to American Stock Exchange Request
05 August 2006 - 6:15AM
Business Wire
On July 31, 2006, eLinear, Inc. (AMEX:ELU) received a letter from
the American Stock Exchange indicating that the Company is in
non-compliance with the Exchange's continued listing standards of
Section 1003 of the AMEX Company Guide. Specifically, AMEX noted
the Company's failure to comply with Section 1003(a)(i) of the AMEX
Company Guide relating to shareholders' equity of less than
$2,000,000 and losses from continuing operations and/or net losses
in two out of three most recent fiscal years and Section
1003(a)(ii) of the AMEX Company Guide relating to shareholders'
equity of less than $4,000,000 and losses from continuing
operations and/or net losses in three out of its four most recent
fiscal years. The notice was based on a review by the AMEX of the
Company's Form 10-QSB for the three months ended March 31, 2006.
The Company has been afforded the opportunity to submit a plan of
compliance to the AMEX by August 31, 2006 advising AMEX of the
action the Company has taken, or will take, that would bring it
into compliance with the continued listing standards listed above
by June 30, 2007. If AMEX accepts the plan, the Company may be able
to continue its listing during the plan period of up to ten months,
during which time the Company will be subject to periodic review to
determine whether it is making progress consistent with the plan.
If AMEX does not accept the Company's plan, or even if accepted, if
the Company is not in compliance with the continued listing
standards at the end of the plan period or the Company does not
make progress consistent with the plan during such period, then
AMEX may initiate delisting proceedings. On July 12, 2006 the
Company announced that it signed a Letter of Intent to acquire the
operating assets of SweetWater Security Systems, LLC, a Houston
based provider of complex wireless video security systems for
Public Housing Projects throughout the Southeastern United States.
In the transaction, it is contemplated that eLinear will issue
25,000,000 shares of its common stock from authorized but unissued
shares for certain assets of SweetWater. Those assets consist of
certain accounts receivable, equipment, inventory, contractual
agreements and up to $3 million in cash. SweetWater primarily
operates in Louisiana, Mississippi, Alabama, and Tennessee and has
completed over $3 million in projects to date. The proposed
transaction, if completed, will result in a substantial increase in
shareholders' equity. This transaction is scheduled for closing
sometime in the fourth quarter and is subject to shareholder
approval. Another critical factor affecting eLinear's capability to
regain compliance will be the achievement of one of the Company's
main goals of operating income profitability on a month to month
basis during 2006. The Company is considering what other actions it
may take to regain compliance with the AMEX listing standards and
intends to submit a compliance plan to the AMEX Staff in a timely
manner. About eLinear, Inc. eLinear, Inc. is a communications,
security and compliance company providing integrated technology
solutions including information and physical security, IP Telephony
and network and storage solutions infrastructure. Typically, the
company's customers are Fortune 2000 and small to medium sized
business organizations. eLinear's services are offered to companies
seeking to increase productivity or reduce costs through investing
in technology. eLinear has a national and international footprint
and has its headquarters in Houston, Texas. For more information,
see http://www.elinear.com. Safe Harbor Statement This press
release contains statements that may constitute forward-looking
statements, including the company's ability to realize the
projected revenues from the newly announced project orders and the
future strength of the company's business and industry. These
statements are based on current expectations and assumptions and
involve a number of uncertainties and risks that could cause actual
results to differ materially from those currently expected. For
additional information about eLinear please visit www.elinear.com
or www.sec.gov. eLinear undertakes no obligation to update any
forward-looking statement that may be made from time to time by or
on behalf of the company, whether as a result of new information,
future events or otherwise.
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