CITY OF INDUSTRY, Calif.--(BUSINESS WIRE)--Dec. 21, 2005--Global ePoint, Inc. (Nasdaq: GEPT - News), a leading manufacturer of security technologies for the aviation, law enforcement, industrial and commercial markets, today announced that it has resolved comments received from the Nasdaq Stock Market concerning the Company's private placement sale of its Series D Convertible Preferred Stock.
As described in the Company's press release dated December 16, 2005, the Nasdaq had taken the position that the Company's placement of Series D Convertible Preferred Stock should be aggregated for Nasdaq compliance purposes with its June 2005 placement of its Series C Convertible Preferred Stock. According to the Nasdaq, the aggregation of the two placements resulted in a violation of Marketplace Rule 4350(i)(1)(D), which requires shareholder approval for issuances of common stock or securities convertible into common stock if the amount of the issuance is equal to 20% or more of the common stock outstanding before the issuance, and is issued at a price less than the greater of market value or book value of the stock before the issuance.
The Company resolved the Nasdaq's comments by agreeing to amend the Certificate of Designations for its Series D Convertible Preferred Stock. The principal amendment will result in a modification of the price at which the Company may, at its option, pay dividends or effect a redemption of the Series D preferred stock by issuing shares of its common stock. The Series D Certificate of Designations requires the Company to pay dividends, in cash, at the rate of 6% per annum, and provides for the Company's mandatory and permissive redemption of the Series D Preferred Stock, also in cash. The Certificate of Designations had allowed the Company, at its option, to pay dividends and any redemption price by issuing shares of its common stock at a price equal to 92.5% of the market price of the Company's common stock on the date of payment. In order to resolve the Nasdaq's comments, the Company has agreed to amend the Certificate of Designations to provide a floor of $3.33 on the effective price at which the Company can issue shares in payment of the Series D dividend or any redemption payment.
According to Toresa Lou, Chief Executive Officer of Global ePoint, "We are satisfied with the resolution of the Nasdaq's comments. We do not believe that the amendments to the Series D Certificate of Designations will materially affect our rights or obligations under the Series D Certificate of Designations."
On December 20, 2005, the Nasdaq Stock Market issued to the Company a letter accepting the Company's resolution of the issue and confirming that the Company is in compliance with the Nasdaq Marketplace Rules.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, and actual circumstances, events or results may differ materially from those projected in such forward-statements. The Company cautions readers not to place undue reliance on any forward-looking statements. The Company does not undertake, and specifically disclaims any obligation, to update or revise such statements to reflect new circumstances or unanticipated events as they occur.
Global ePoint, Inc.
John Price, 909-869-1688. ext 307
CEOcast, Inc. for Global ePoint
Ed Lewis, 212-732-4300