The SCO Group
announced Thursday that it faces
possible delisting from the NASDAQ stock exchange for failing to file an
annual report with the Securities & Exchange Commission (SEC) on time.
Company officials will request a hearing on the delisting notice before the Feb. 25 deadline. Meanwhile, SCO will work with auditor KPMG to file its so-called Form 10-K and resolve accounting questions regarding its 2000 employee stock purchase plan.
“This one is really more of an anomaly than anything,” SCO spokesman Blake Stowell said. “The NASDAQ has certain rules where if you don’t file your year-end 10-K and other filings within the prescribed time frame then they’re obligated . . . to issue a letter of notification that there’s a possibility of being delisted.”
SCO is embroiled in a lengthy breach of contract and copyright infringement lawsuit with IBM
over the alleged use of Unix System IV source code in the Linux kernel.
Beginning tomorrow, the Lindon, Utah, company’s stock ticker will have an “E” appended to it, warning investors the stock is delinquent in its filing obligations.
Historically, public companies have 90 days to file the annual report. Similar to the annual report to shareholders — which reports financial and operational information — the Form 10-K contains more detailed information on the company’s financial condition for the fiscal year. Under a coming rule change, the filing deadline will be 60 days next year.
Stowell said SCO will file an appeal with NASDAQ, though the
company plans to have the stock purchase plan questions answered in short order.
Once the request is sent, the NASDAQ listing qualifications panel will schedule a hearing to review the case. SCO’s stock will not be delisted during that timeframe, giving the company more time to file its paperwork.
According to Stowell, this is the second time the company has faced delisting. It received notice two-and-a-half years ago when its stock dipped below $1. The company performed a 4-for-1 reverse stock split, which raised its share price above the minimum requirement.