Earthshell faces lawsuits, bills -- and Nasdaq delisting
Rachel Sams
Staff
In October, cash-strapped EarthShell Corp. approved a reverse stock split to boost its stock price so it could stay on the Nasdaq stock exchange.
Just weeks later, the company -- facing lawsuits and overdue vendor bills -- again faces being kicked off the exchange.
EarthShell, a California company whose technology has been used in making Big Mac boxes, has operations in Lutherville. The company has lost nearly $300 million since its inception in 1992.
Its reverse stock split created one share of new common stock from 12 shares of its previous common stock. That pushed the stock price above the $1 minimum required by Nasdaq.
But Nasdaq notified EarthShell that it again faces delisting, according to a Dec. 2 Securities and Exchange Commission filing that registered some shares of EarthShell stock for resale by stockholders.
The market value of EarthShell's outstanding common stock has fallen below Nasdaq's $35 million requirement.
A Nasdaq delisting would put EarthShell in default on its agreement with holders of $11 million in convertible debt it issued earlier this year.
EarthShell president and chief operating officer Vince Truant said the company hopes to increase its market capitalization and work with Nasdaq to keep its listing.
"The company does have the need for additional cash resources into the business, and we are pursuing some options to do that right now," he said.
In September, Green Packaging and Green Earth Packaging of Dallas filed lawsuits against EarthShell, which had ended a licensing relationship with them. The lawsuits allege breach of contract and violations of antitrust law, and seek damages of more than $12 million.
EarthShell (www.earthshell.com) faces unpaid bills closer to home.
Baltimore electrical contractor Gill-Simpson Inc. sued EarthShell last month in the Circuit Court for Baltimore County, saying EarthShell owes it more than $225,000.
EarthShell also faces ongoing lawsuits in Maryland courts by at least two other contractors seeking payment.
