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Phoenix Footwear sales impacted by difficult retail environment

16 Oct '09

6 min read

The time period extensions are subject to the Company's continuing adherence to various conditions. The Amendment requires the Company pay Wells Fargo a $25,000 accommodation fee on December 1, 2009 unless Phoenix Footwear repays the indebtedness in full on or before November 30, 2009.

As of October 14, 2009, the Company had $2.8 million outstanding under the Credit Agreement with remaining availability of $221,000. The Company is engaged in discussions with several different financing sources concerning the refinancing of the revolving line of credit debt on or before November 30, 2009.

The description of the agreements above is qualified in its entirety by reference to the full text of the applicable agreements, copies of which will be attached as an exhibit to the Company's Quarterly Report on Form 10-Q for the period ended October 3, 2009.

NYSE Amex Delisting Notice
On October 9, 2009, the Company received a notice from the NYSE Amex LLC (NYSE Amex), indicating that as of its quarter ended July 4, 2009, the Company failed to meet the continued listing standards of the NYSE Amex. Specifically, the letter stated that the Company is not in compliance with Section 1003(a)(ii) of the NYSE Amex Company Guide, with stockholders' equity of less than $4,000,000 and losses from continuing operations and/or net losses in three of its four most recent fiscal years.

The letter also stated that the Company must submit a plan to the NYSE Amex by November 9, 2009 addressing how it intends to regain compliance with this continued listing standards by April 11, 2011. The plan must be approved by the NYSE Amex in order for the Company to maintain its listing. The Company intends to submit a plan shortly to the NYSE Amex that responds to this notification.

The policy of the NYSE Amex is to make a determination within 45 days of a company's submission of a plan for compliance as to whether the company has made reasonable demonstration in the plan of an ability to regain compliance with the continued listing standards within the requisite time frame. The NYSE Amex may either accept the plan, at which time the Company will be subject to ongoing monitoring for compliance with the plan, or not accept the plan and initiate delisting proceedings.

There can be no assurance that the NYSE Amex will accept any plan that the Company submits or that, if it does accept any such plan, the NYSE Amex will not subsequently initiate delisting proceedings as a result of the NYSE Amex's compliance monitoring with respect to that plan or otherwise.

Phoenix Footwear Group, Inc., headquartered in Carlsbad, California, designs, develops and markets men's and women's footwear and accessories. Phoenix Footwear's brands include Trotters, SoftWalk and H.S. Trask. Emphasizing quality, fit, and traditional and authentic designs, these brands are primarily sold through department stores, specialty retailers, mass merchants and catalogs.

Phoenix Footwear Group, Inc

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