Hines Deregisters Stock
Hines Horticulture Inc. in Irvine, Calif., has announced plans to deregister its common stock with the Securities and Exchange Commission (SEC). Hines’ board of directors decided to take this action because the burdens associated with operating as a registered public company outweigh any advantages to Hines and its stockholders.
Among factors the board considered were:
- The costs, both direct and indirect, incurred by Hines each year in connection with preparing and filing periodic reports with the SEC and otherwise complying with the obligations of being a public company, including the substantial increase in costs associated with the requirements of the Sarbanes-Oxley Act of 2002 and related SEC rules.
- The benefits of permitting senior management to spend less time on report preparation and regulatory compliance, which will allow them to devote their attention and efforts to Hines’ operations.
- The historically low trading volume of the company’s stock
- The concentration of stock ownership in relatively few holders
The company is eligible to deregister because it has fewer than 300 shareholders of record. In an official statement, Hines says it expects, but cannot guarantee that its common stock will continue to be quoted on the Pink Sheets after it deregisters. There can also be no assurance that any brokerage firms will continue to make a market in the common stock after the deregistering. Pink Sheets is a provider of pricing and financial information for over-the-counter securities markets.
Hines says it intends to update its stockholders with information about the company through press releases and postings on its Web site, www.hineshorticulture.com.