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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 Committees 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 Committees work to date, the Company believes that the
alleged transactions will have an effect on certain of the Companys
previously filed financial statements and/or notes related thereto.
Accordingly, on December 15, 2005, the Board of Directors determined that the
Companys 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
Companys 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 Companys 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 Companys 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 Companys
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
Companys 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 Companys
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 Companys 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 Companys revised accounting
treatment or reissue their audit reports on the Companys restated financial
statements.
ABOUT RICA FOODS, INC.
The Companys operations are largely conducted through its operating
subsidiary, Corporacion Pipasa, S.A. Pipasas 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 Companys 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
mmarenco@ricafoods.com.
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