Prospective XTV Purchaser to Have Stock Delisted

Jeff Berg
DEERFIELD BEACH, Fla. — Media holding company Interactive Brand Development, current holder of a non-binding letter of intent to acquire 99 percent equity in XTV, has received notice that the company’s common stock is going to be delisted from the American Stock Exchange, due in part to a series of insider trading transactions.

Formerly known as Care Concepts, IBD disclosed in recently filed SEC documents obtained by XBiz that AMEX told the company on Jan. 10 that it intends to begin the delisting process and the company had seven days to appeal the decision.

According to the SEC documents, AMEX officials voiced concern about IBD’s acquisition of 39.9 percent minority interest in Penthouse Media Group and the financing that needed to be obtained for that purchase, as well as the issuing of more than 20 percent of the company’s outstanding stock without shareholder approval.

AMEX officials also believe that the company may have engaged in operations contrary to the public interest by selectively disclosing non-public information, having insiders trade securities while in possession of that information and inaccurately reporting the amount of outstanding common stock in SEC filings.

The company is also financially impaired and reported a working capital deficit of $37,000, according to AMEX.

Interactive stated in a press release that it believes that the AMEX staff made conclusions based on incomplete or unclear information.

Interactive’s stock listing has been hanging in the balance since September, when the company first announced that it intended to purchase beleaguered payment processor iBill. At the time, AMEX temporarily restricted trading on the stock citing a variety of public interest concerns.

With the termination of the iBill acquisition at the beginning of December, though, Interactive said that it believed all of its stock listing issues had been resolved.

The company also said in December that the public interest concerns cited by AMEX were due to the company’s involvement with the adult industry.

“The American Stock Exchange objected to the closing of the iBill transaction and cited, among other factors, concerns that iBill may be inadvertently engaging in transactions with web merchants that offer pornographic materials on the Internet in violation of federal and state laws,” said Interactive at the time.

While that information was contrary to press releases filed with the SEC, which stated that the public interest concerns were due to not properly furnishing information related to the iBill acquisition, it appears now that the concerns addressed by AMEX actually had to do with insider stock sales made based on non-public information made in July.

Calls to Interactive spokespeople were not returned by deadline.