During the course of the FY2010 audit, SLF encountered difficulties in confirming the cash balances in the Company's bank accounts and verifying the existence of customers in the People's Republic of China (PRC). To address this, SLF exercised its best judgment to extend its audit procedures in these two areas, but the Company's management resisted SLF's efforts. As a result, SLF was unable to satisfactorily complete the full confirmation process on the cash balances in the Company's bank accounts and the verification procedures on the existence of customers. Therefore, SLF was unable to complete its work in order for the Company to file its annual report on time, resulting in the decision of the Exchange to suspend the trading of HQ stock.
HQ Sustainable Maritime Industries announced today that it had received a notice from the NYSE Amex dated April 1, 2011 stating that the Company was not in compliance with certain continued listing standards of the NYSE Amex Company Guide. Specifically, the Company was not in compliance with standards set forth under Sections 134 and 1101 of the Exchange Company Guide since the Company has not yet filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2010. The Exchange notified the Company that pursuant to Section 1003(d) of the Company Guide, the Exchange was authorized to suspend and, unless prompt corrective action is taken, remove the Company's securities from the Exchange. Currently, the trading in the Company's securities has been halted.
The Company must submit a plan of compliance by April 15, 2011 advising the Exchange staff of the actions it has taken, or will take, that would bring the Company into compliance with foregoing Sections by no later than June 30, 2011. The Company is taking steps to prepare and submit such a plan to the Exchange staff by the required submission date.