Item 8.01 Other Events.
Order Instituting Administrative Proceeding
On July 2, 2020, ERBA Diagnostics, Inc. (the "Company") became aware of the
existence of an Order Instituting Administrative Proceedings and Notice of
Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934 (the
"Order"), dated July 1, 2020, by the Securities and Exchange Commission (the
"SEC"), naming the Company as a respondent, a copy of which is attached hereto
as Exhibit 99.1. In the Order, the SEC stated that the Company is delinquent in
its periodic filings with the SEC, failed to meet its obligations to file timely
reports and failed to comply with Section 13(a) of the Securities Exchange Act
of 1934 (the "Exchange Act") and Rules 13a-1 and 13a-14 thereunder. As stated in
the Order, the SEC has deemed it necessary and appropriate for public
administrative proceedings to be instituted to determine, among other things,
whether it is necessary and appropriate to suspend for a period not exceeding
twelve months, or revoke the registration of, the common stock of the Company,
which is registered pursuant to Section 12 of the Exchange Act. Although the
Company has not yet been served, the Order states that the Company will have ten
days after the date of service of the Order to provide the SEC with an answer to
the Order.
The Company is assessing various courses of action under the current
circumstances in an effort to preserve the value of the Company for its
stockholders, including the manner in which, or whether, to provide an answer to
the Order or to participate in the administrative hearing. There can be no
assurance that Company will be able to prevail at any administrative hearing or
that the registration of the common stock of the Company, which is registered
pursuant to Section 12 of the Exchange Act, will not be revoked or suspended.
If the registration of the Company's common stock is revoked or suspended, then,
unless the Company is able to otherwise register its common stock, the trading
of the Company's common stock will cease, the Company's periodic reporting
obligations under Section 13(a) of the Exchange Act will terminate, and no
member of a national securities exchange, broker or dealer will be permitted to
use the mails or other means of interstate commerce to effect any transaction in
or to induce the purchase or sale of any shares of the Company's common stock.
As previously reported, other than the filing of Current Reports on Form 8-K,
the Company has not filed any periodic reports since it filed a Form 10-Q for
the period ended June 30, 2015. As previously reported, during the third quarter
of 2015, the Company implemented, 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. 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. As previously reported, the
Company financial statements 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
should no longer be relied upon.
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Suspension of Trading
On July 5, 2020, the Company became aware of the existence of a SEC Release
announcing the temporary suspension of trading in the Company's common stock
commencing on July 2, 2020 and terminating on July 16, 2020, a copy of which is
attached as Exhibit 99.2. The SEC's decision to halt the trading in the
Company's common stock was entered pursuant to Section 12(k) of the Exchange
Act. As discussed above, the Company is assessing various courses of action
under the current circumstances in an effort to preserve the value of the
Company for its stockholders. Although this is a temporary suspension of
trading, there can be no assurance that trading in the Company's common stock
will ever resume.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibit 99.1 - SEC Order Instituting Administrative Proceedings and Notice
of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934,
dated July 1, 2020.
Exhibit 99.2 - SEC Release No. 89207, dated July 1, 2020.
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