ERBA Diagnostics (ERB) Failed to Meet NYSE MKT Listing Compliance Deadline

September 29, 2016 4:07 PM EDT

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As previously reported, ERBA Diagnostics, Inc. (NYSE: ERB) implemented during the third quarter of 2015, among other things, a new, enhanced balance sheet review process, with a particular focus on reconciliation of significant accounts, including, among others, intercompany accounts, and corresponding eliminations made, or required to be made, at the consolidated level, and their potential impact on the Company’s consolidated financial statements. As previously reported, in the course of implementing such new, enhanced review process, the Company identified materially out of balance accounts evident in the elimination process and noted erroneous recording of transactions to such intercompany and other accounts for each of the years ended December 31, 2014 and 2013 and for each of the interim periods ended March 31, 2015 and June 30, 2015 (the “Restatement Periods”). The Company also previously reported its intention to restate its financial statements for the Restatement Periods.

As previously reported, the Company was not able to timely file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2015, Annual Report on Form 10-K for the year ended December 31, 2015, Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 (the “Reports”). As previously reported, the Company received letters from the NYSE MKT LLC (the “Exchange”) stating that the Company’s failure to timely file the Reports is a material violation of its listing agreement with the Exchange and, therefore, pursuant to Section 1003(d) of the Exchange’s Company Guide (the “Company Guide”), the Exchange is authorized to suspend and, unless prompt corrective action is taken, remove the Company’s securities from the Exchange. As previously reported, the Company submitted a plan of remediation and compliance, as amended (the “Plan”), to the Exchange and the Exchange accepted the Plan and granted the Company an extension until November 25, 2016 to regain compliance with the continued listing standards of the Company Guide.

As previously reported, the Company received a letter on August 31, 2016 from Mayer Hoffman McCann P.C. (“MHM”), the Company’s independent registered public accounting firm, advising the Company of MHM’s resignation as the Company’s independent registered public accounting firm. In connection with the Company’s efforts to interview and select a potential successor independent registered public accounting firm, the Company has received written and verbal proposals from various potential successor firms, which proposals generally estimate a timeframe of approximately four to eight months to complete the work to allow the Company to file the Reports and the prior financial statements that the Company has previously reported its intention to restate.

Accordingly, the Company has determined that it will not be able to file the Reports and regain compliance with the continued listing standards of the Company Guide by November 25, 2016. As a result the Company expects that trading in the Company’s common stock will be suspended promptly by the Exchange. The Company also expects that the Exchange will move forward with the initiation of delisting procedures, including the issuance of a delisting notice to the Company (which, after receipt thereof, the Company also plans to disclose).



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