Get Started for Free Contexxia identifies hard-to-find pieces of information in SEC filings. No more highlighters, no more redlining, no more poring over huge documents. Swisher Hygiene Inc. (1504747) 10-Q published on May 11, 2016 at 4:37 pm
Reporting Period: Mar 30, 2016
In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update ASU No. 2016-02, Leases (Topic 842). This accounting standard requires that a lessee recognize a lease asset and a lease liability on its balance sheet for all leases, including operating leases, with a term greater than 12 months. ASU 2016-02 will require additional disclosures in the notes to the consolidated financial statements and is effective for annual and interim reporting periods beginning after December 15, 2018. The Company does not expect a material impact from ASU No. 2016-02 on the consolidated financial statements as it does not currently have any leases.
In connection with the Honeycrest Holdings, Ltd. Litigation, as discussed further in Note 11, “Commitments and Contingencies”- Other Matters, the Company recorded a litigation accrual. Such accrual was originally recorded in the consolidated accounts of CoolBrands International, Inc. prior to its domestication in the state of Delaware as Swisher Hygiene Inc. in 2010. Due to uncertainties related to the resolution of this matter, this accrual has remained on our balance sheet since that time.
On April 8, 2016, the Board of Directors of Swisher Hygiene Inc. unanimously approved the filing of a Certificate of Dissolution (the “Certificate”) on Friday, May 27, 2016 (the “Final Record Date”). The Certificate will be filed with the Secretary of State of the State of Delaware on the Final Record Date. The filing of the Certificate will be made pursuant to a Plan of Dissolution approved by stockholders at the Company’s annual meeting held on October 15, 2015.
The Company has notified OTCQB that the Certificate will be filed on the Final Record Date and that as of 6:00 pm Eastern Time on the Final Record Date, the Company’s shares will cease to be traded on OTCQB. Also after the Final Record Date, the Company’s stock transfer books will be closed and transfers of the shares of the Company’s common stock will no longer be recorded. The Company also requested relief from the Securities and Exchange Commission (the “SEC”) to suspend certain of its reporting obligations under the Securities Exchange Act of 1934, as amended (“No Action Letter”). If the SEC grants such relief, the Company intends to report any further material events relating to the liquidation and dissolution on Form 8-K.
Pursuant to the Plan of Dissolution, and under Delaware law, the dissolution of the Company shall be effective as of 6:00 pm Eastern Time on the Final Record Date. Under Delaware law, the dissolved corporation is continued for three (3) years (unless extended by direction of the Court of Chancery) to enable the Company’s directors to wind up the affairs of the corporation, including the discharge of the Company’s liabilities and to distribute to the stockholders any remaining assets. No assurances can be made as to if or when any such distribution will be made, or the amount of any such distribution, if one is made. Any distribution, however, would be made to the Company’s stockholders of record as of the Final Record Date.
The Company will continue to use the remaining cash resources to pay retained liabilities, ongoing corporate and administrative costs and expenses associated with winding down the Company, liabilities and potential liabilities relating to or arising out of pension plan obligations to employees of its predecessor, outstanding litigation matters of the Company, including but not limited to pending stockholder litigation related to the Sale Transaction, and potential liabilities relating to the Company's indemnification obligations, if any, to Ecolab pursuant to the Agreement, or to current and former officers and directors pursuant to the Company's bylaws and articles of incorporation (collectively, the "On-going Obligations"). As described in Note 12 – Subsequent Event to the Notes to the Condensed Consolidated Financial Statements, on April 8, 2016, the Board of Directors unanimously approved the filing of a Certificate of Dissolution on Friday, May 27, 2016. The Plan of Dissolution and Complete Liquidation which was previously approved by the Company's stockholders at its Annual Meeting on October 15, 2015. Under Delaware law, the dissolved corporation is continued for three (3) years (unless extended by direction of the Court of Chancery) to enable the Company’s directors to wind up the affairs of the corporation, including the discharge of the Company’s liabilities and to distribute to the stockholders any remaining assets. The Company can neither estimate nor provide any assurance regarding amounts to be distributed to stockholders if the Board of Directors proceeds with the dissolution.