Blue Holdings Makes Nice With NASDAQ
Blue Holdings, the publicly traded maker of Antik, Taverniti So and Yanuk premium denim, got into hot water with NASDAQ in June in connection with an agreement the company signed with musician William Adams.
Adams, who performs as will.i.am with the Black Eyed Peas, signed on with Blue Holdings in May to consult on a new premium-denim and apparel line, I.Am.Antik. As part of the agreement, Adams would consult on the design, marketing and promotion of the brand in exchange for 500,000 shares of Blue Holdings stock over five years. At press time, Blue Holdings’ stock was trading at $1.32 per share, making Adams’ shares worth $660,000.
According to a filing with the Securities and Exchange Commission, NASDAQ found the stock-in-exchange- for-services arrangement in violation of NASDAQ regulations because the denim maker neglected to win shareholder approval for the deal. Marketplace Rule 4350 requires shareholder approval prior to any compensation arrangement that calls for a consultant to be paid in stock.
On June 12, Blue Holdings finalized an agreement with Adams and delayed the transfer of the initial shares to Adams until shareholders could approve the deal. A vote on the venture was held during Blue Holdings’ annual meeting on June 21. At press time, the result of the shareholder vote was unknown, but a release from Blue Holdings said NASDAQ had determined that the company’s latest actions had won it compliance with Marketplace Rule 4350 and considered the matter closed. —Erin Barajas
