8-KSecurities & ListingOther Events

Monster Beverage Corp 8-K Report, Listing Notice (Nov 20, 2006)

Filed November 20, 2006For Securities:MNST

Summary

Monster Beverage Corp (formerly Hansen Natural Corporation) filed an 8-K on November 20, 2006, detailing two significant events. Firstly, the company received a notification from Nasdaq indicating potential delisting due to the delayed filing of its Form 10-Q for the quarter ended September 30, 2006. Hansen Natural Corporation intends to request a hearing to appeal this determination, with its shares remaining listed pending the outcome. Secondly, a shareholder derivative lawsuit was filed in California Superior Court against certain officers and directors. The lawsuit alleges stock option backdating dating back to 1996, claiming manipulation of grant dates to maximize insider profits without proper compensation expense recognition. It further alleges the filing of materially false and misleading financial statements and disclosures, understating compensation expenses and overstating net income and EPS.

Key Highlights

  • 1Hansen Natural Corporation received a Nasdaq Staff Determination letter on November 15, 2006, indicating potential delisting due to non-compliance with listing rules related to the delayed filing of the Q3 2006 Form 10-Q.
  • 2The company plans to request a hearing before the Nasdaq Listing Qualifications Panel to appeal the delisting determination.
  • 3Hansen's shares will continue to be listed on the Nasdaq Capital Market pending the Panel's decision.
  • 4A shareholder derivative lawsuit was filed on November 14, 2006, in California Superior Court.
  • 5The lawsuit names certain officers and directors as defendants and alleges stock option backdating dating back to 1996.
  • 6Allegations include manipulation of option grant dates for insider profit, failure to record material compensation expense, and filing of false and misleading financial statements and disclosures.
  • 7The company believes the lawsuit is without merit and intends to vigorously defend itself.

Frequently Asked Questions

Hansen Natural Corporation received a notification of potential delisting because it had not yet filed its Form 10-Q for the quarter ended September 30, 2006, which is a requirement for continued listing on the Nasdaq Capital Market.

The lawsuit is a derivative action filed by a shareholder on behalf of the company. It alleges that certain officers and directors engaged in stock option backdating since at least 1996, manipulating grant dates to benefit insiders and failing to properly record compensation expenses. The suit also claims that this led to materially false and misleading financial statements and disclosures.

The company believes the complaint is without merit and intends to vigorously defend itself against the lawsuit.

No, the stock will remain listed on the Nasdaq Capital Market pending the company's request for a hearing before the Nasdaq Listing Qualifications Panel and their subsequent decision.