A small British Columbia wireless network equipment manufacturer says it will fight a decision by the Toronto Stock Exchange to delist its shares at the end of today for failing to meet the exchange’s listing requirements.
In a news release issued Monday morning before the market opened, Tranzeo Wireless Techonolgies Inc. of Pitt Meadows, B.C., said it “believes that its business continues to merit listing on the TSX, particularly in view of the achievements made by the company in securing WiMax and backhaul sales to major Indian telecommunications providers.
“The company will also concurrently initiate efforts to list on an alternate Canadian stock exchange should any appeal not be successful,” the release added. “Tranzeo assures investors that it will purse all avenues to ensure that the company’s common shares will continue to be publicly traded in Canada.”
Tranzeo, which makes point to point and point to multipoint radios for service providers and enterprises, has been in trouble with the TSX since July 25 when it first announced there was a problem. At that point the exchange gave the company four months to meet its requirements. Monday’s announcement signals that goal wasn’t met.
Generally, TSX-listed technology company has to have a minimum of $10 million in its treasury, adequate funds to cover development and capital expenditures, a minimum market value of issued securities of at least $50 million and the minimum value of its securities has to be $10 million. Technology companies also have to have adequate funds to cover all planned development and capital expenditures, and general and administrative expenses for a period of at least one year.
Shortly after the TSX announced it’s listing review in July, Tranzeo
announced it had approved private placement financings totalling $2.216 million, including $1.216 million in secured convertible debentures, to be used as working capital to fulfill existing orders and contracts.
Tranzeo’s shares have been drifting down for the past 12 months. A year ago the shares sold at about 55 cents each. When the market closed last week they were priced at a dime. When the market opened this morning after the TSX announcement the shares were under a penny.
Last month chief financial officer Douglas Howes resigned as chief financial officer, and was replaced on an interim basis by board chair Patrick Smith. Howes remained as a consultant until a permanent CFO is hired.
According to its third quarter results, issued last month, the company had revenue of $2.7 million, compared to $2.1 million a year ago, with gross profit of about $800,000.
Financially, the company hit its peak in 2008, when it had $19.4 million in revenue. In 2010 the company pulled in $11.1 million in revenue, compared to $11.6 million in 2009. Gross profit was $2.8 million for 2010 and $3.2 million for 2009.
One problem is that its WiMax product line was a mainstay
. In North America demand for WiMax has dropped, although it is strong in other parts of the world. Fixed WiMax is an alternative broadband technology to high speed landline service, particularly in rural areas.
In April Tranzeo bought Aperto Networks Inc., a San Jose, Calif.-based maker of broadband, mobile WiMax and enteprise virtual private network equipment. At the time Tranzeo said the all-share acquisition would help it become a complete end-to-end broadband solutions provider offering Wi-Fi, WiMax and LTE equipment.