Devcon moves from Nasdaq to OTC

BOCA RATON, Fla.--Devcon was preparing to move from the Nasdaq stock exchange to the OTC Bulletin Board on May 12 as Security Systems News went to press. “This has nothing to do with the underlying health of the business,” Robert Farenhem, president of Devcon, told Security Systems News. Rather, he said, this move is necessitated by a breach of technical requirements to be listed on Nasdaq exchange, which he characterized as “harsh accounting requirements that security businesses suffer.” Devcon was notified in mid April that it was out of compliance with the Nasdaq requirement that it have a minimum of $10 million in shareholder equity. “Two and a half years ago we had $2.5 million in RMR,” Farenhem said, “and today we have $3.6 million in RMR … but over that period of time we have amortized about $40 million [for the purchase of Guardian International in 2007].” The OTC differs from Nasdaq in that it is “market-maker driven rather than open quotation-driven.” The move will not affect the operation of Devcon, Farenhem said, but “it does have impacts on our capital structure and we’re going to have to deal with that.” Devcon was to be delisted from Nasdaq on May 16. Should the transfer of the company’s stock to OTC not be complete by that date, the company’s stock would be “quoted on the Pink Sheets, an electronic quotation service for securities traded over the counter, until such clearance is obtained.”