Gonzo's Parent Firm Possible Delisting

[Koby]

The Tokyo Stock Exchange notified investors on Monday that GDH, the parent holding company of the Gonzo anime studio and the GONZO Rosso Online game studio, has been put on a one-year grace period to improve its finances or face delisting. The grace period was retroactively dated back to April 1 (the beginning of the Japanese fiscal year) of this year and will end on March 31 of next year. According to the exchange, these steps are being taken since GDH has been determined to be insolvent, or having total financial liabilities that exceed its total financial assets, during the accounting period that ended in March of 2008. The steps went into effect in accordance with article 603, section 3 of the exchange's listing regulations (page 38).

Depending on the circumstances, a company and its subsidiaries can continue to operate even if its stocks have been delisted. Between now and 2009, Gonzo will be working on S.A, Strike Witches, Rosario + Vampire Capu2, Linebarrels of Iron, and The Tower of Druaga: the sword of Uruk. On May 30, GDH announced a net loss of 3.752 billion yen (about US$35.44 million) on 6.853 billion yen (US$64.45 million) of revenue for the fiscal year ending on March 31, 2008. GDH's stock price stands at 21,000 yen (US$198) on Wednesday, after briefly rising above 50,000 yen (US$470) in May.