CanArgo Energy Corporation
NYSE Alternext US : CNR

CanArgo Energy Corporation

March 29, 2009 19:14 ET

CanArgo Energy Corporation: NYSE Alternext Continued Listing Requirements

GUERNSEY, BRITISH ISLES--(Marketwire - March 29, 2009) - CanArgo Energy Corporation ("CanArgo" or the "Company") (NYSE Alternext US:CNR) (OSLO:CNR) today announced that on March 27, 2009 it was notified by the Staff of the NYSE Alternext US LLC (the "Exchange") that the Staff had determined that the Company's Plan to regain compliance with its deficiencies in meeting the continued listing requirements previously submitted to the Exchange did not make a reasonable demonstration of its ability to regain compliance by the end of the Plan Period and that it was initiating immediate delisting proceedings. The Company does not intend to appeal the Exchange's decision and the Company expects the Exchange's decision to become final on or before April 3, 2009.

As previously publicly announced, the Company was notified by the staff of the Exchange, on January 5, 2009, that the Staff had determined, following a review of publicly available information, that the Company was not in compliance with Section 1003(a)(iv) of the NYSE Alternext Company Guide (the "Company Guide") in that it had sustained losses which were so substantial in relation to its overall operations or its existing financial resources, or its financial condition had become so impaired that it appeared questionable, in the opinion of the Exchange, as to whether the Company would be able to continue its operations and/or meet its obligations as they mature.

The Exchange further notified the Company that, as a result of the Company's low share price of its common stock, the Company's common stock may not be suitable for auction market trading. In accordance with Section 1003(f)(v) of the Company Guide, the Exchange notified the Company that it deemed it appropriate under the circumstances for the Company to effect a reverse stock split to address its low selling price and if a reverse stock split was not completed within a reasonable timeframe, the Exchange would consider suspending dealings in, or delisting, the Company's common stock.

Finally, as a result of the previously announced resignation of one of its independent directors the Company was no longer in compliance with Sections 803 (A)(1) and Section 803(B)(2)a of the Company Guide, which require, respectively, that at least a majority of the Company's directors are independent and that the Company's audit committee be comprised of at least three independent directors. Specifically, the Company currently only has two independent directors of the four directors on the Company's Board of Directors and an audit committee composed of only two members.

The Company was offered an opportunity to file a plan with the Exchange of the steps it intended to take to regain compliance with the continued listing requirements of the Exchange within certain designated periods ("Plan Periods"). The Company submitted its plan of compliance on February 17, 2009 (the "Plan").

On March 27, 2009, the Company was notified by the Staff that it had determined, following a review of the Plan, that the Plan did not make a reasonable demonstration of the Company's ability to regain compliance with the Exchange's continued listing standards by the end of the Plan Periods based upon the following reasons: the Staff's concerns that due to the Company's current severely impaired financial condition it would be unable to restructure its outstanding subordinated debt, which is currently in default, thereby precipitating possible bankruptcy proceedings; the severity of the Company's financial impairment could result in an inability to secure audited financial statements timely thereby delaying the filing of CanArgo's Form 10-K for the fiscal year ended December 31, 2008 by the required date of March 31, 2009 (violating Sections 134 and 1101 of the Company Guide); there was significant uncertainty regarding the Company's ability to receive the funds it is seeking in litigation against the defaulting standby underwriters in its rights offering concluded in October 2008 by the end of the Plan Period, and the Company's common stock was continuing to trade at extremely low levels. Due to the nature and severity of the deficiencies cited above, as well as the triggering of these additional deficiencies, Staff determined to apply commentary .01 of Section 1009 of the Company Guide and not offer the Company an opportunity to submit a plan of compliance related to these deficiencies. Based on the foregoing, the Staff has concluded that it was appropriate to initiate immediate delisting proceedings at this time.

The Exchange intends to strike the Company's common stock from the Exchange by filing a delisting application with the Securities and Exchange Commission pursuant to Section 1009(d) of the Company Guide. The Company does not intend to appeal the Exchange's decision and the Company expects the Exchange's decision to become final on or before April 3, 2009.

The matters discussed in this press release include forward-looking statements, which are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated in such forward-looking statements. Such risks, uncertainties and other factors include the uncertainties inherent in oil and gas development and production activities, the effect of actions by third parties including government officials, fluctuations in world oil prices and other risks detailed in the Company's reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission. The forward-looking statements are intended to help shareholders and others assess the Company's business prospects and should be considered together with all information available. They are made in reliance upon the safe harbour provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company cannot give assurance that the results will be attained.

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