Rica Foods, Inc. Receives Non-Compliance Notification from the AMEX
04 January 2006 - 10:32AM
PR Newswire (US)
MIAMI, Jan. 3 /PRNewswire-FirstCall/ -- Rica Foods, Inc. (Amex:
RCF; the "Company"). As expected and pursuant to prior
conversations with the American Stock Exchange ("AMEX"), the
Company announced that it received notice (the "AMEX Notice") from
the staff of the AMEX indicating that the Company is not in
compliance with certain of the AMEX continued listing standards. As
previously disclosed by the Company on Form 8-K filed on December
21, 2005, the Board of Directors of the Company received a letter
from a shareholder alleging the occurrence of certain undisclosed
transactions between the Company and Mr. Calixto Chaves, his
affiliates and/or Industrias Avicolas Integrades, S.A., a
Nicaraguan poultry and animal feed company, during Mr. Chaves'
tenure as Chief Executive Officer of Rica from August 1996 until
January 2005. A Special Investigation Subcommittee (the
"Committee") of the Audit Committee was established and charged
with, among other things: (i) conducting an investigation relating
to the allegations and (ii) reviewing the allegations to determine
other facts reasonably necessary to allow the Company and its
advisers to determine the appropriate disclosures necessary or
desirable in connection therewith. Although the Committee's
investigation is on-going, the Committee has secured certain
statements and/or documents that indicate all of the alleged debts,
pledges and guaranties of the Company have been satisfied and/or
cancelled since at least July 2004. Based on the Committee's work
to date, the Company believes that the alleged transactions will
have an effect on certain of the Company's previously filed
financial statements and/or notes related thereto. Accordingly, on
December 15, 2005, the Board of Directors determined that the
Company's audited and un-audited financial statements and related
independent auditors' reports since December 1999 should no longer
be relied upon. As previously disclosed by the Company, Stonefield
Josephson, Inc., the Company's independent accountant
("Stonefield"), effective December 15, 2005, withdrew its audit
reports dated December 27, 2004, December 29, 2003 and May 23, 2003
with respect to the Company's financial statements for the fiscal
years ended September 30, 2004, 2003 and 2002 (the "Stonefield
Audited Financial Statements") and indicated to the Company that
that it should make appropriate disclosure that the Stonefield
Audited Financial Statements and the related audit reports should
not be relied upon. The AMEX Notice indicates that, in light of the
foregoing, the Company's Annual Reports on Form 10-K for the fiscal
years ended September 30, 2004, 2003 and 2002 are now considered
defective filings, which constitutes a violation of Sections 134
and 1101 of the AMEX Company Guide and a material violation of the
Company's listing agreement with the AMEX. The AMEX Notice
indicates that the Company is required to contact the AMEX by
January 4, 2006 to, among other things, discuss any new
developments and indicate whether or not the Company intends to
submit a Compliance Plan (as defined below). The AMEX Notice
further indicates that, in order to maintain its AMEX listing, the
Company must submit a plan by January 10, 2006, advising the AMEX
of actions it has taken, or will take, that would bring the Company
in compliance with the Sections 134 and 1101 of the AMEX Company
Guide by no later than February 22, 2006 (the "Compliance Plan").
The Company intends to use its best efforts to provide the
Compliance Plan to the AMEX prior to the required date If the
Compliance Plan is accepted by the AMEX, the listing of the
Company's common stock will continue pursuant to an extension. The
AMEX Notice states that if the Company fails to provide an
acceptable plan by January 10, 2006 or is not in compliance with
the continued listing standards by February 22, 2006, the AMEX may
initiate delisting proceedings, as appropriate. In either event,
the Company may appeal if the AMEX staff makes a determination to
initiate delisting proceedings in accordance with applicable AMEX
rules. In the AMEX Notice, the AMEX also noted that, within five
days of the date of the AMEX Notice, the Company will be included
in a list of issuers, which is posted daily on the AMEX website,
that are not in compliance with the continued listing standards and
".LF" will be appended to the Company's trading symbols whenever
such trading symbols are transmitted with a quotation or trade.
Accordingly, RCF will trade as RCF.LF. The website posting and
indicator will remain in effect until the Company has regained
compliance with all applicable continued listing standards. The
Company is devoting substantial resources and working with its
independent auditors to complete and file restated financial
statements as soon as reasonably possible and to restore its
compliance with the AMEX requirements. However, despite the
Company's best efforts, there can be no assurances that the Company
will be able to regain compliance with all applicable AMEX
continued listing standards by February 22, 2006 or that its
independent auditors will consent to the Company's revised
accounting treatment or reissue their audit reports on the
Company's restated financial statements. ABOUT RICA FOODS, INC. The
Company's operations are largely conducted through its operating
subsidiary, Corporacion Pipasa, S.A. Pipasa's primary business is
derived from the production and sale of broiler chickens, processed
chicken, beef and pork by-products, commercial eggs, and premixed
feed and concentrate for livestock and domestic animals. The
Company's subsidiaries own 97 urban and rural outlets throughout
Costa Rica, three modern processing plants and four animal feed
plants. Pipasa exports its products to all countries in Central
America, Colombia, Dominican Republic and Hong Kong. For more
information contact Rica Foods at (305) 858-9480, or e-mail to .
DATASOURCE: Rica Foods, Inc. CONTACT: Mauricio Marenco of Rica
Foods, +1-305-858-9480,
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