The company, which launched in October 1997, said its decision was based on the results to date of its efforts to pursue strategic alternatives and its conclusion that, under any scenario, its outstanding liabilities, which totalled approximately $274 million as of 31st January, will substantially exceed the value of any proceeds or assets that may be received in a strategic transaction. Accordingly, the company has determined that it has no alternative other than to file for bankruptcy protection.
The company also said that, in light of these facts, it has concluded that its shares “have no value” and are, in its opinion, “worthless”.
In addition, the company said it has received a notice from Nasdaq that it no longer meets the minimum net tangible assets requirement for The Nasdaq National Market. The company does not believe that it will be able to regain compliance with this requirement, and it has notified Nasdaq of this fact. Accordingly, the company anticipates that its common stock will be de-listed from trading in the very near term, certainly sooner than the previously expected date of May 2, 2001.
EToys has given notice of termination to all employees. The company anticipates that it will close the eToys.com web site on or about 8th March and that, thereafter, the company will focus solely on the winding down of its business and the liquidation of its assets.