Debt Resolve Eases Fears of AMEX Delisting

Online collection provider Debt Resolve, Inc. (AMEX: DRV) said that a recent funding agreement will assuage fears that it will be delisted from the American Stock Exchange after the exchange sent a letter to the company last week warning that it was not in compliance with terms required for ongoing listing.

In a U.S. Securities and Exchange Commission filing Monday, White Plains, N.Y.-based Debt Resolve said that it had received a letter from AMEX on January 7 “alleging that the company was not in compliance with specific provisions of the AMEX continued listing standards." The exchange letter referred to a section of AMEX policy that states a company faces delisting if it “has sustained losses which are so substantial in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it appears questionable, in the opinion of the Exchange, as to whether such issuer will be able to continue operations and/or meet its obligations as they mature.”

Debt Resolve responded in its SEC filing Monday that it is moving forward with a previously-announced funding agreement with The Resolution Group that will see TRG invest $4.5 million in Debt Resolve. Under the agreement, Debt Resolve and TRG will institute a note-modification program and referral of clients in the banking and healthcare industries.

AMEX accepted Debt Resolve’s plan on January 10, according to the filing, and will grant an extension to Debt Resolve to remain listed on the exchange. Debt Resolve says that it will be fully compliant with AMEX listing rules by April 4.

Debt Resolve’s stock closed Friday at $0.89 a share, down precipitously since it began trading last November at $5 a share. It hadn’t opened for trading as of midday today. It reported a loss of $3.3 million in the third quarter.