Millennium Electronics Loses CEO, Faces Delisting

Troubled computer memory manufacturer Millennium Electronics said its founder resigned as head of the company, its stock will be delisted and it is moving to much smaller quarters in Aliso Viejo.

Troy Barnes, a Laguna Beach resident who had headed Millennium since its inception in 1994, resigned as president and chief executive officer, the company said. Barnes also was the company’s principal stockholder.

Kenneth Gerstner, the company’s chief financial officer, has been appointed interim chief executive and president.

In resigning, Barnes agreed to return 2.9 million shares, worth about $1.2 million based on the stock’s most recent price of 41 cents a share. A securities document filed by the company last year showed that he and his wife had 4.1 million shares at the time.

The company also said it has been notified by Nasdaq officials that its stock will be dropped from the market unless it can show that it meets certain financial criteria. In a news release, the company said it probably won’t be able to do so, and that delisting could occur as early as March 12.

Company officials did not return calls for comment.

Last April, the company moved into a 34,000-square-foot facility in Irvine to do in-house manufacturing, as opposed to subcontracting to an outside source. But the company experienced production delays as a result of the start-up, according to the company’s regulatory filings.

The company also had a high level of returns as a result of quality problems, which the company blamed on poor testing by a third-party manufacturer.

The company’s last report to regulators, filed in November, showed that Millennium had no cash on hand, and that since the beginning of 1998, its total assets had been cut nearly in half to $7.3 million.

The company had a net loss of $2.6 million in the third quarter. During the first nine months of the year, its losses totaled $4.7 million.