Cyberonics Receives Third Staff Determination Letter

    HOUSTON, Dec. 18 /PRNewswire-FirstCall/ -- Cyberonics, Inc. (Nasdaq:  
 CYBX) today announced that it received a third Staff Determination Letter
 from the NASDAQ Stock Market Inc. on December 13, 2006.
     As previously announced on August 1, 2006, as a result of the delay in
 filing its Annual Report on Form 10-K for its fiscal year ended April 28,
 2006 ("2006 Annual Report"), Cyberonics received a Staff Determination
 Letter from NASDAQ dated July 31, 2006. The Staff Determination Letter
 indicated that Cyberonics was not in compliance with the filing requirement
 for continued listing set forth in Marketplace Rule 4310(c)(14), and that
 its securities were, therefore, subject to delisting from The NASDAQ Global
 Market.
     On August 3, 2006, Cyberonics requested a hearing before a NASDAQ
 Listing Qualifications Panel ("NASDAQ Panel") to review the NASDAQ Staff's
 determination. On August 4, 2006, Cyberonics received formal notice from
 NASDAQ that the delisting action had been stayed pending a written decision
 from the NASDAQ Panel and that the NASDAQ Panel would review the NASDAQ
 Staff's determination at a hearing on September 14, 2006.
     On September 12, 2006, Cyberonics announced that it received a second
 Staff Determination Letter on September 8, 2006 indicating that Cyberonics
 also fails to comply with the filing requirement for continued listing set
 forth in Marketplace Rule 4310(c)(14) as a result of the delay in filing
 its Quarterly Report on Form 10-Q for its fiscal quarter ended July 28,
 2006 (the "First Quarterly Report") and that its securities are, therefore,
 subject to delisting from The NASDAQ Global Market. This second letter
 advised Cyberonics to address the delay in filing the First Quarterly
 Report at the September 14, 2006 NASDAQ Panel hearing.
     On September 14, the Company participated in a hearing before the
 NASDAQ Panel and presented to the NASDAQ Panel its reasons for failing to
 file the required reports and requested continued listing.
     On November 6, 2006, the Company received a letter from the NASDAQ
 Panel informing the Company that the NASDAQ Panel has determined to grant
 the request of the Company for continued listing on The NASDAQ Stock Market
 subject to two conditions: (1) on or before November 17, 2006, the Company
 must submit additional information to NASDAQ regarding the Company's
 internal review of its stock option grants, practices and procedures; and
 (2) on or before December 31, 2006, the Company must file with the
 Securities and Exchange Commission ("SEC") its 2006 Annual Report and its
 First Quarterly Report, and any required restatements of its prior
 financial statements.
     On November 17, 2006, the Company submitted additional information to
 NASDAQ regarding the Company's internal review of its stock option grants,
 practices and procedures.
     On December 13, 2006, the Company received a third Staff Determination
 Letter from NASDAQ. This third Staff Determination Letter indicated that
 the Company also fails to comply with the filing requirement for continued
 listing set forth in Marketplace Rule 4310(c)(14) as a result of the delay
 in filing its Quarterly Report on Form 10-Q for its fiscal quarter ended
 October 27, 2006 ("Second Quarterly Report") and that its securities are,
 therefore, subject to delisting from The NASDAQ Global Market. This third
 letter advises the Company to present its views with respect to this
 additional deficiency to the NASDAQ Panel in writing no later than December
 20, 2006, and the Company intends to do so; however, there can be no
 assurance that the Company's common stock will remain listed on The NASDAQ
 Stock Market.
     ABOUT CYBERONICS
     Information on Cyberonics, Inc. is available at
 http://www.cyberonics.com .
     SAFE HARBOR STATEMENT
     This press release contains forward-looking statements within the
 meaning of Section 27A of the Securities Act of 1933, as amended and
 Section 21E of the Securities Exchange Act of 1934, as amended. These
 statements can be identified by the use of forward-looking terminology,
 including "may," "believe," "will," "expect," "anticipate," "estimate,"
 "plan," "intend," and "forecast," or other similar words. Statements
 contained in this press release are based upon information presently
 available to the Company and assumptions that the Company believes to be
 reasonable. The Company is not assuming any duty to update this information
 should those facts change or should we no longer believe the assumptions to
 be reasonable. Investors are cautioned that all such statements involve
 risks and uncertainties, including without limitation, statements
 concerning the timing of filing of the Forms 10-K and 10-Q and of the
 Company's written presentation to NASDAQ. The Company's actual decisions,
 performance and results may differ materially. Important factors that may
 cause actual results to differ include, but are not limited to: continued
 market acceptance of VNS Therapy and sales of the Company's product; the
 development and satisfactory completion of clinical trials and/or market
 test and/or regulatory approval of VNS Therapy for the treatment of
 Alzheimer's disease, anxiety, or other indications; adverse changes in
 coverage or reimbursement amounts by third-parties; intellectual property
 protection and potential infringement claims; maintaining compliance with
 government regulations and obtaining necessary government approvals for new
 applications; product liability claims and potential litigation; reliance
 on single suppliers and manufacturers for certain components; the accuracy
 of management's estimates of future expenses and sales; the results of the
 previously disclosed governmental inquiries; the impact of any restatement
 of the Company's financial statements or other actions that might be taken
 or required as a result of such inquiries or the review by the Audit
 Committee of the Company's Board of Directors of the Company's stock option
 grants, procedures, and practices, including a default under credit
 facilities or debt instruments; the potential identification of new
 material weaknesses in the Company's internal controls over financial
 reporting; risks and costs associated with such inquiries or review and any
 litigation relating thereto or to the Company's stock option grants,
 procedures, and practices (including the previously disclosed private
 litigation); uncertainties associated with compliance with the requirements
 of the NASDAQ Panel to avoid possible delisting of the Company's stock from
 NASDAQ for failure to file timely periodic reports with the SEC;
 uncertainties associated with any appeal concerning any possible delisting
 by NASDAQ; uncertainties associated with stockholder litigation and other
 risks detailed from time to time in the Company's filings with the SEC. For
 a detailed discussion of these and other cautionary statements, please
 refer to the Company's most recent filings with the SEC, including its Form
 10-K for the fiscal year ended April 29, 2005.
 
 

SOURCE Cyberonics, Inc.

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