Toledo's N-Viro International Corp. said yesterday it has issued 500,000 shares of a new class of preferred stock to try to raise $1.25 million to help keep the company's common stock from being delisted by the Nasdaq exchange.
The announcement, made the day after the firm's $750,000 line of credit was to expire, is a bold move by one of the region's smallest publicly traded companies to stave off stock and financial problems. The firm lost $1.3 million last year.
N-Viro, which sells waste-treatment processes, said it has hired Laux & Co., a Medina, Ohio, investment bank firm, to handle the preferred stock, which is to be priced at $2. 50 a share.
The local firm also said it has transferred a license to use its sludge processing technology to WorldTech Waste Management, Inc., a privately held soil remediation company in Saltville, Va., in exchange for an option to purchase 350,000 shares of N-Viro stock held by WorldTech.
``We have already contacted potential investors about it,'' said Terry Logan, N-Viro president and chief operating officer. ``Our plan is to get this all done by the end of June.''
The plan was devised with the assistance and approval of Nasdaq officials, he said. If the preferred stock is sold, proceeds will be used ``to assist the company in increasing its tangible net worth above $2 million, thereby enabling the company to avoid having its shares delisted from the Nasdaq SmallCap Market,'' the company said.
Nasdaq said in March it would remove N-Viro from its trading list because the company's net worth was too small. The Toledo business has appealed the ruling and expects a decision soon. To keep its stock listed, it must have an asset value of at least $2 million, $2.5 million in stockholders' equity, $35 million in market value, or a profit of at least $5000,000 in the most recent fiscal year.
Whether the preferred stock will be sold in enough quantity and in time to satisfy Nasdaq is uncertain.
Mr. Logan said the company could meet the exchange's requirements if it is able to sell its minority interest in Florida N-Viro, a limited partnership that operates a waste treatment facility in Volusia County, Florida.
The sale would have an indirect bearing on N-Viro's repurchase of its stock now held by WorldTech. Under an agreement between the two firms, N-Viro has six months to exercise its option to buy the 350,000 shares at an agreed upon price of about $2.50 a share. If the Toledo firm it sells its stake in Florida N-Viro, Mr. Logan said, the company would realize a profit of $2 million or more, and then would have to buy back its stock from WorldTech for about $875,000.
The stock buyback is to reduce the number of outstanding shares of the company's common stock and, hopefully, to boost the stock's value, Mr. Logan said. N-Viro's stock closed down 2 cents at 96 cents a share yesterday in very light trading.