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Item 3.01
Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On June 23, 2011, the Board of Directors (the “Board”) of China-Biotics, Inc. (the “Company”) unanimously voted to voluntarily delist the Company’s common stock from the Nasdaq Global Stock Market (“Nasdaq”). The Board has determined that maintaining the listing of the Company’s common stock on Nasdaq has imposed difficult burdens on the Company. These burdens have been compounded by the recent resignations of the Company’s former auditor, BDO Limited, and the
Company’s Chief Financial Officer, Travis Cai, as disclosed by the Company in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on June 23, 2011, as well as the resignation of Mr. Simon Yick, the former Chairman of the Audit Committee of the Board, as disclosed by the Company in a Current Report on Form 8-K filed with the SEC on June 28, 2011.
Pursuant to Nasdaq Marketplace Rule 5840(j) and Rule 12d2-2(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on June 29, 2011, the Company provided written notice to Nasdaq of its intent to file a Notification of Removal from Listing on Form 25 (“Form 25”) with the SEC on or around July 11, 2011. The Company expects the delisting from Nasdaq to become effective on July 21, 2011, ten days after filing Form 25 with the SEC.
Upon delisting from Nasdaq, the Company expects that trading by stockholders of shares of the Company’s common stock may be effected through quotations on the Pink OTC Market (a centralized quotation service that collects and publishes market maker quotes for securities). This will require at least one market maker to quote the Company’s common stock on the Pink OTC Market after the market maker complies with the Pink OTC Market rules; there is no assurance that a market maker will comply with those rules. The Company has not arranged for its shares to be quoted on any securities
exchange. Notwithstanding any of the foregoing, the Company will remain subject to the periodic reporting requirements of the Exchange Act.
The Company previously reported its receipt from Nasdaq of a letter (the “Nasdaq Letter”) stating that, because the Company has not yet filed its Annual Report on Form 10-K for the fiscal year ended March 31, 2011, and based upon disclosures made by the Company in its recently filed Form 12b-25 and additional information provided to Nasdaq, the Company no longer complies with Nasdaq Listing Rules for continued listing. In addition, the Nasdaq Letter requested that the
Company provide to Nasdaq a formal “plan of compliance” setting forth the steps that the Company proposes to take to regain compliance for continued listing of the Company’s common stock on Nasdaq, as well as certain other information relevant to Nasdaq’s evaluation of the plan of compliance. In light of the Company’s decision to seek voluntary delisting of its stock from Nasdaq, the Company has determined that it will not provide Nasdaq with such plan of compliance or other requested information.
The Board has determined that the effort required to challenge Nasdaq’s determination, and the uncertain outcome of any such challenge, as well as the uncertainty of when, if ever, the Company will be able to satisfy Nasdaq’s concerns in light of the recent resignation of its auditor, support its decision to seek delisting of its common stock from Nasdaq in the best interests of the Company and its stockholders.
The Company will comply with all applicable provisions of Delaware law, under which the Company is incorporated, as well as applicable provisions of the Nasdaq Marketplace Rules and the SEC rules applicable to the delisting process.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
