After months of struggling to beef up its customer base and emerge, even slightly, from debt, Adaptive Broadband Corp. said it’s officially open to the possibility of a sale, merger or recapitalization of the company.
The company said it has received unsolicited interest in potential strategic opportunities during the past several weeks, and determined it appropriate to further explore these options.
“We believe that the potential exists to enhance our financial performance and maximize shareholder value by evaluating various alternatives, including aligning with the right strategic partner,” said Daniel Scharre, Adaptive Broadband chairman and chief executive officer.
Franchesca Walker, vice president of marketing for Adaptive Broadband, said it was too early to say which option-sale, merger or recapitalization-will actually occur, but a sale or merger most likely will happen with a similar-type entity that needs Adaptive Broadband’s technology to fill out its product offering.
“We are really in the early stages and we’re looking at all of our options. What is interesting is that this was unsolicited. They came to us. There is an appetite for our technology and our type of product,” Walker said.
The company’s woes began several months ago when, among other things, slow sales in the point-to-multipoint market caused the company to adjust its third-quarter revenue estimates from $2 million to about $1 million, and on May 4, reduce its work force from 150 to 60 employees.
Nasdaq then halted trading of Adaptive Broadband stock on May 14, at which time it sold for 85 cents per share. Nasdaq delisted Adaptive Broadband on May 22 after it failed to file its Form 10-K for the transition period ended Dec. 31 with the Securities and Exchange Commission in the allotted time.
Adaptive Broadband was supposed to complete its accounting review and bring its filings current no later than last Friday. Walker said to the best of her knowledge, the company met the deadline. Adaptive Broadband plans to a meeting with Nasdaq in hopes of getting its stock listed again.
Throughout all this, there also are several class-action lawsuits, instigated by shareholders, pending against the company. They allege Adaptive Broadband and two of its top officers issued false and misleading statements about the company’s financial condition. Specifically, that Adaptive Broadband improperly recognized a $4 million sales transaction during the quarter ended June 30, 2000. On March 15, the company said that the $4 million in revenues “should not have been recognized,” and that it expected to reduce its quarterly revenue by that amount.
In related broadband wireless news, multichannel multipoint distribution system equipment supplier Hybrid Networks Inc. announced it received notice from the Nasdaq national market that it has failed to comply with the minimum market capitalization requirement for continued listing, and Hybrid’s application for transfer to the Nasdaq SmallCap Market has been denied.
Hybrid requested a hearing before the Nasdaq listing qualifications panel to review the decision, and this hearing will defer the delisting of Hybrid’s securities until the listing qualification panel makes a decision. Hybrid’s stock was originally supposed to be delisted June 6. At RCR Wireless News press time, the stock was trading at 68 cents per share.
