Allegro
to Pursue (1) Orderly Wind-Down and (2) Termination of Reporting
Obligations
Los
Angeles, CA October 8, 2009 – Allegro Biodiesel Corporation (OTC: ABDS)
(“Allegro” or the “Company”) released the following statement
today.
In our
most recent 10-Q, we indicated that unless we received a suitable offer for a
strategic or other transaction (such as a reverse merger) in the near future, we
would likely wind down and dissolve the Company, and that we have engaged
insolvency counsel. We have not received any suitable offers, and
thus we are now focused on pursuing an orderly wind-down in a manner that will
be in the best interest of the stakeholders. The Company has no
operations, a modest amount of cash and some illiquid assets (including the
litigation claim referenced below). Our current view is that a
bankruptcy proceeding is unlikely to yield the best results for our stakeholders
(due to, among other things, the high costs of such a
proceeding). Instead, we hope to effect a gradual wind-down over
time, and without resort to bankruptcy court. However, there can be
no assurances that we will be able to effect such a wind-down. (A recent article
in the Wall Street Journal noted that numerous companies in the biodiesel
industry have filed for bankruptcy.)
In any
event, we do not expect to have sufficient assets to make any liquidating
distribution to the holders of our Common Stock. There can be no
assurance that we will be able to pay or otherwise provide for our outstanding
liabilities. Even if we are able to do so, under the terms of our
outstanding Convertible Preferred Stock, we would not be able to make any
distributions to the holders of our Common Stock unless we first satisfied the
liquidation preference of the Convertible Preferred Stock. The
aggregate liquidation preference of the Convertible Preferred Stock is
approximately $29.5 million. We do not foresee any set of
circumstances that would allow us to fully satisfy this liquidation
preference. Thus, we do not foresee any set of circumstances that
would allow us to make any distribution to the holders of our Common
Stock.
The
Company is also exploring options for terminating its status as a reporting
company under the Securities Exchange Act of 1934. The costs of preparing and
filing documents with the Securities Exchange Commission (together with the
related expenses of being a public reporting company) are significant expenses
for the Company. In light of the very limited trading in our Common
Stock and our recent review of the number of record holders thereof, and given
that we do not foresee any realistic prospect of any distribution to, or
residual value for, holders of our Common Stock, we believe that, on balance, it
is in the best interests of the Company to reduce these expenses to the greatest
degree practical.
Thus, we
anticipate that we will likely file a Form 15 with the SEC in the near
future. Immediately upon filing a Form 15, most of our obligations to
file reports (such as Quarterly Reports on Form 10-Q) with the SEC would be
suspended. We anticipate that the Form 15 would become effective
approximately 90 days after filing; at that point our status as a reporting
company under the Securities Exchange Act of 1934 would be officially
terminated. As a result of filing a Form 15, we expect that our
Common Stock will cease to trade on the OTC Bulletin Board in due
course. We do not intend to take any actions to facilitate quotation
of our Common Stock on the “Pink Sheets.”
The
Company has recently filed a complaint in the United States District Court for
the Southern District of New York against certain former members (the “Former
Members”) of Vanguard Synfuels, LLC (“Vanguard”). The complaint
alleges that the Former Members made certain material misstatements and failed
to disclose certain material facts in connection with the Company’s original
acquisition of Vanguard from the Former Members in September
2006. The complaint seeks an unspecified amount of damages, interest
and attorneys’ fees. We intend to vigorously pursue this claim;
however, litigation is inherently uncertain and there can be no assurances as to
whether we will be successful.
Caution
Regarding Forward-Looking Statements
This
press release includes statements that may constitute forward-looking statements
made pursuant to the safe harbor provisions of the U.S. Private Securities
Litigation Reform Act of 1995. To the extent that this press release discusses
any beliefs, plans or expectations about future performance or actions, possible
strategic transactions, future disclosures or filings, or other statements about
the future, such statements are forward-looking. Without limiting the
generality of the foregoing, any statements made herein regarding the planned
wind-down of the Company, potential outcomes of such a wind-down or any
bankruptcy or other proceedings, our ability to liquidate assets, whether we
will be able to satisfy creditors or the liquidation preference of our
Convertible Preferred Stock, and our plans to file a Form 15 and the timing and
impact thereof should be considered forward-looking statements. These statements
are subject to a number of risk factors and uncertainties (including factors
outside of our control, such as actions of third parties) that could cause
actual results to differ materially from those described or implied
herein. In the addition, we reserve the right to abandon, withdraw or
change any of the planned actions described herein. Risk factors may also
include the risk factors discussed in the Risk Factors, Business Description and
Management's Discussion and Analysis sections of our Annual Report on Form
10-KSB for the year ended December 31, 2008, and our subsequent Quarterly
Reports on Form 10-QSB for the quarterly periods ended on March 31, 2009 and
June 30, 2009. The foregoing is not meant to be an exclusive
list. Except as may be otherwise required by law, we do not undertake
any obligation to update any forward-looking statement, whether as a result of
new information, future events or otherwise. If we do update or correct one or
more forward-looking statements, you should not conclude that we will make
additional updates or corrections with respect thereto or with respect to other
forward-looking statements.
Contact:
Cathy
Valentino
310.670.2093
cvalentino@oceanparkadvisors.com
