Care Concepts I has delayed the closing of its purchase of Internet Billing Company (iBill) parent Media Billing Company.
Care Concepts said the delay was due to an apparent notice that the American Stock Exchange will de-list Care Concepts common stock from trading pending a hearing asked for by Care Concepts. Care Concepts announced the delay September 24, a month after it made public its intent to acquire Media Billing/iBill from from Penthouse International.
The AMEX notice raised questions about regulatory compliance, including, apparently, questions as to whether Care Concept provided the stock trading index full information about the iBill purchase, and whether it issued 20 percent or more of its common stock without prior shareholder approval.
This does not mean that Care Concepts intends to back away from buying iBill, the company stressed. Care Concepts said in their announcement they will provide the requested information, hoping that the AMEX will approve the iBill acquisition's completion. But if that approval doesn't come by January 21, 2005, Care Concept continued, they would close the iBill deal anyway, pull out of the AMEX entirely, and try to relist its common stock on another exchange.
"It is [Care Concepts's] clear objective to resolve with the AMEX all issues relating to the iBill acquisition and to permit the continued trading of its stock on the AMEX for the benefit of its shareholders," said Care Concepts president Gary Spaniak, Jr. in a statement.
Spaniak also said Care Concepts plans to engage a compliance officer regarding the operation of the company, adding he expects Care Concepts stock – which stopped trading September 21 – to begin trading again on the AMEX September 27.
The Care Concepts rescinding came two days after iBill lost a bid to have First Data Bank – whose processing contract with iBill expired earlier this month – live up to a purported agreement to help iBill while it makes a transition to a new processing bank beginning in November.
A representative from iBill was unavailable for comment before this story went to press.
"By agreeing to rescind the closing of the iBill acquisition unless, and until, the Company has satisfactorily resolved all listing eligibility issues, and receives all necessary AMEX approvals related to the iBill transaction," Care Concepts said in an announcement, "the staff of the AMEX has agreed to withdraw its notice of intent to de-list the Company's securities. There can be no assurance that the Company will be able to satisfactorily resolve all listing issues or that it will receive all such AMEX approvals associated with the iBill transaction."
Care Concepts bought iBill and its parent from Penthouse earlier this year; the deal closed in August following several months of turmoil including Penthouse itself facing a major issue of overhauling its finances and its operations. Penthouse had earlier bought iBill but soon enough offered it for sale.
The AMEX staff notice also said there were "omissions and inconsistencies" in Care Concept's so-called 8-KA report earlier this month in terms of how many common stock shares were issued to Penthouse as part of the iBill buy.
"[Care Concepts] completed an acquisition, the net effect of which was that the Company was acquired by an unlisted company and the Company did not provide adequate information to the staff for it to determine whether the post transaction company meets the initial listing standards as required by Section 341 of the Company Guide," the AMEX staff notice said.
Care Concepts said they think there may have been disclosure "of certain material non-public information" concerning the AMEX notice, without elaborating on just what that information was.
