CITY OF INDUSTRY, Calif. — (BUSINESS WIRE) — June 7, 2006 — Global ePoint, Inc. (Nasdaq: GEPT -– News), a leading manufacturer of security technologies for the aviation, law enforcement, industrial and commercial markets, announced today that it received a letter from the Nasdaq Stock Market on June 1, 2006 stating that Global ePoint did not comply with Marketplace Rule 4310(c)(17), which requires issuers to notify the Nasdaq on the appropriate form fifteen days in advance of entering into a transaction that may result in the potential issuance of common stock, or securities convertible into common stock, in an amount greater than 10% of the issuer’s total shares outstanding prior to such transaction.
On May 19, the Company received initial terms for a proposed financing transaction that provided that the Company would issue securities convertible into shares of its common stock in exchange for approximately $8.1 million. While the Company disclosed the initial terms of the transaction to the Nasdaq verbally and in writing, the Company did not submit the form and related transaction documents required by Marketplace Rule 4310(c)(17). The Company executed definitive agreements on May 23, 2006 and closed the transaction on May 25, 2006.
The Company responded promptly to the above-referenced letter and provided all requested documents to the Nasdaq within two business days. Accordingly, the Company believes that it has taken all action necessary to resolve the matter described in the June 1, 2006 letter regarding Marketplace Rule 4310(c)(17).
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-looking 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.