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American Stock Exchange |
James P. Mollen
Director Listing Qualifications
T 212 306 2391
F 212 306 5359
james.mollen@amex.com
Via Facsimile and Federal Express
July 7, 2006
Mr. Paul N. Hanson
Vice President and Chief Financial Officer
Communications Systems, Inc.
213 South Main Street
Hector, MN 55342
Dear Mr. Hanson:
As you are aware, Communications Systems, Inc. (Communications or the Company) is not in compliance with certain of the American Stock Exchanges (the Amex or the Exchange) continued listing standards. Specifically, the Company is not in compliance with Sections 134 and 1101 of the Amex Company Guide (the Company Guide)(1) due to the fact that it failed to file with the Securities and Exchange Commission (the SEC), its Form 10-Q for the period ended March 31, 2006 (the 2006 First Quarter Report).
By letter dated May 25, 2006, Staff notified the Company of its deficiency and offered it an opportunity to provide a business plan (the Plan) by June 8, 2006 demonstrating how it would be able to regain compliance with the Exchanges continued listing standards by July 6, 2006. On June 8, 2006, the Company submitted its Plan, which it later amended by letter dated July 6, 2006 (the Amended Plan). The Amended Plan states, among other things, that the Company has not been able to finalize its 2006 First Quarter Report, mainly due to the Companys inability to collect its JDL subsidiarys accounts receivable totaling $3,033,742. Further, in its Amended Plan, the Company requests an extension of time to bring Communications into compliance with Sections 134 and 1101 of the Company Guide by September 6, 2006 (the Extended Plan Period).
The Exchange has completed its review of the Companys Amended Plan and has determined that, in accordance with Section 1009 of the Company Guide, the Amended Plan makes a reasonable demonstration of the Companys ability to regain compliance with the continued listing standards by the end of the Extended Plan Period, or September 6, 2006. Therefore, at this time we are prepared to continue the listing of Communications subject to the following conditions:
(1) The Amex Company Guide may be accessed at www.amex.com.
At the end of the Extended Plan Period, September 6, 2006, Communications must be in compliance with all the continued listing standards including the issue described above. Failure to regain compliance within the timeframe outlined above will likely result in the Exchange Staff initiating delisting proceedings pursuant to Section 1009 of the Company Guide.
We appreciate your attention to this matter and we look forward to continuing to work with you through this difficult time. Towards that end, it is important during this process that you continue to communicate with the Exchange on a proactive basis regarding all corporate developments. If we may be of any assistance in this matter, please do not hesitate to contact me, or Diana Dodi, Lead Analyst, at (212) 306-2396.
Please acknowledge your acceptance of the conditions outlined in this letter by signing and returning the enclosed copy of this letter by July 14, 2006.
Very truly yours,
/s/ James F. Mollen |
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Acknowledged and Agreed to: |
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Mr. Paul N. Hanson |
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Vice President and Chief Financial Officer |
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Communications Systems, Inc. |
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