Bryan, Ohio (Feb. 27, 2004) -- Toy maker The Ohio Art Co., best known for its Etch-A-Sketch product, said it plans to de-list its common stock from the American Stock Exchange, due largely to the high costs of complying with the requirements of the Sarbanes-Oxley Act.
The 96-year-old company also sited the low number of stockholders of record in the company's stock and the limited extent of its stock’s trading as reasons for the de-listing, according to a recent 8-K filing with the Securities and Exchange Commission.
"After careful consideration, the board of directors concluded that it was no longer in the best interests of the company to be subject to the SEC's reporting requirements," William Killgallon, Ohio Art's chairman and chief executive said in a statement. "Changing conditions for our business have created an environment where the advantages of being a public reporting company are outweighed by the significant accounting, legal and administrative costs that are associated with the SEC's reporting requirements. These costs can be expected to increase due to recent legislation and the continuing expansion of SEC regulation.”
The stock is expected to cease trading on the Amex by the end of March. Following its deregistration and de-listing, the stock will likely be quoted on the Pink Sheets, an electronic quotation service for over-the-counter securities.
Ohio Art's stock plunged more than 30 percent during the first trading day after the announcement, pushing its market capitalization below $7 million before it closed the day down 20 percent. The stock was trading around $11 and $12 per share for the better part of this year, but hasn't traded much above $8 per share since the news.
-- WebCPA staff
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