Liberty Tax Announces John Hewitt's Sale of Stake in Liberty Tax; Receipt of Anticipated Nasdaq Delinquency Letter; Hewitt Also Tenders His Resignation From The Board
Benzinga 8 years ago
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Liberty Tax, Inc. (NASDAQ:TAX) (the “Company”), the parent company of Liberty Tax Service, announced today that John T. Hewitt, the Chairman of the Company’s Board of Directors (the “Board”), former Chief Executive Officer of the Company and founder of the Company, entered into an agreement to sell all of the shares of the Company’s Class A Common Stock and Class B Common Stock owned directly or indirectly by him (the “Sale”) to an unaffiliated third party, Vintage Tributum LP, an affiliate of Vintage Capital Management, LLC, an Orlando-based investment firm that focuses on public and private market investments in the consumer, manufacturing and defense industries (“Vintage”). The Sale is expected to close promptly. In connection with the Sale, the shares of the Company’s Class B Common Stock will convert into shares of the Company’s Class A Common Stock, and no shares of the Company’s Class B Common Stock will remain outstanding. In addition, Vintage also entered into an agreement with other stockholders of the Company to purchase additional shares of the Company’s Class A Common Stock.
In connection with the Sale, Mr. Hewitt agreed to tender his resignation to the Board and to cause the following members of the Board (all previously elected to the Board by Mr. Hewitt) to tender their resignations to the Board, effective upon the closing of the Sale: Gordon D’Angelo, Ellen M. McDowell, Nicole Ossenfort and John Seal. Ms. Ossenfort will continue to serve as the Company’s President and Chief Executive Officer following her resignation from the Board.
In addition, the Company also announced today that, as a result of its failure to timely file its Annual Report on Form 10-K for the fiscal year ended April 30, 2018 (the “Form 10-K”), it has received, as anticipated, a letter from Nasdaq (the “Letter”) stating that the Company is not in compliance with Nasdaq’s continued listing rules under the timely filing criteria established under Nasdaq Listing Rule 5250(c)(1) (the “Rule”). The Letter also formally notified the Company that the Nasdaq Hearings Panel (the “Panel”) would consider this matter in rendering a determination regarding the Company’s continued listing on The Nasdaq Global Select Market.
The Company previously disclosed that it was unable to file the Form 10-K within the prescribed time period due to the Company’s recent engagement of Cherry Bekaert LLP as its new independent registered public accounting firm on June 28, 2018. The Company is working diligently to complete its delayed filings with the Securities and Exchange Commission (the “SEC”) and to regain compliance with the Rule as soon as possible. However, there can be no assurance that the Panel will grant the Company’s request for continued listing on Nasdaq, or that the Company’s plans to exercise diligent efforts to complete its delayed filings with the SEC and maintain the listing of its common stock on Nasdaq will be successful.
In connection with the Sale, Mr. Hewitt agreed to tender his resignation to the Board and to cause the following members of the Board (all previously elected to the Board by Mr. Hewitt) to tender their resignations to the Board, effective upon the closing of the Sale: Gordon D’Angelo, Ellen M. McDowell, Nicole Ossenfort and John Seal. Ms. Ossenfort will continue to serve as the Company’s President and Chief Executive Officer following her resignation from the Board.
In addition, the Company also announced today that, as a result of its failure to timely file its Annual Report on Form 10-K for the fiscal year ended April 30, 2018 (the “Form 10-K”), it has received, as anticipated, a letter from Nasdaq (the “Letter”) stating that the Company is not in compliance with Nasdaq’s continued listing rules under the timely filing criteria established under Nasdaq Listing Rule 5250(c)(1) (the “Rule”). The Letter also formally notified the Company that the Nasdaq Hearings Panel (the “Panel”) would consider this matter in rendering a determination regarding the Company’s continued listing on The Nasdaq Global Select Market.
The Company previously disclosed that it was unable to file the Form 10-K within the prescribed time period due to the Company’s recent engagement of Cherry Bekaert LLP as its new independent registered public accounting firm on June 28, 2018. The Company is working diligently to complete its delayed filings with the Securities and Exchange Commission (the “SEC”) and to regain compliance with the Rule as soon as possible. However, there can be no assurance that the Panel will grant the Company’s request for continued listing on Nasdaq, or that the Company’s plans to exercise diligent efforts to complete its delayed filings with the SEC and maintain the listing of its common stock on Nasdaq will be successful.