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  Listing Council Decision 2016-1
Identification Number 1288

Public Interest Concern, Filing Delinquency, and Failure to Pay Fees

Rule 5101: Staff has raised public interest concerns over the degree of control the Company has over subsidiary.

Rule 5250(c)(1): A Company shall timely file all required periodic financial reports with the Commission through the EDGAR System or with the Other Regulatory Authority. A Company that does not file through the EDGAR System shall supply to Nasdaq two (2) copies of all reports required to be filed with the Other Regulatory Authority or email an electronic version of the report to Nasdaq at continuedlisting@nasdaq.com. All required reports must be filed with Nasdaq on or before the date they are required to be filed with the Commission or Other Regulatory Authority. Annual reports filed with Nasdaq shall contain audited financial statements.

Rule 5250(f): A Company is required to pay all applicable fees as described in the Rule 5900 Series.

Issue: At issue is whether the company should remain listed notwithstanding that it is delinquent in filing its annual report, failed to publicly disclose material information timely, and public interest concerns raised by Nasdaq's Staff.

Determination: Affirm the decision to suspend and delist the Company.

In light of the facts and circumstances of this matter, including but not limited to, the conduct of the Company and its board of directors with respect to the Company's independent auditor, the Company's independent counsel, and Nasdaq in the delisting proceeding, particularly including: the events giving rise to the resignation of the Company's independent auditor, which concluded that it could no longer accept the representations of the Company's Chairman and CEO, and determined that it could not continue as the Company's auditor unless he was separated from the Company; the independent auditor's finding that the Company does not appear to have an effective board with the ability to discharge its responsibilities; and evidence from the Company's independent counsel that the Company made misrepresentations to Nasdaq in its effort to remain listed; the the Listing Council finds that delisting the Company is appropriate, pursuant to Rules 5101, 5250(c)(1), and 5250(f).

The Listing Council conducts a de novo review of matters before it and, accordingly, it may consider issues not raised in the matter before the Panel or relied on by the Panel as a basis for its decision.

Rule 5101 provides Nasdaq with broad discretionary authority over the listing of securities on Nasdaq in order to maintain the quality of and public confidence in the market, to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade and to protect investors and the public interest. The importance of timely filing of financial statements, as required by Rule 5250(c)(1), cannot be understated. Moreover, the Listing Council notes that the Company failed to pay its annual listing fees, as required by Rule 5250(f). Taken together, the Listing Council concludes that the Company does not fully understand the obligations of a public company. Based on the facts and circumstances of this matter and for the reasons stated above, the Listing Council  determined to delist the Company's shares from Nasdaq. Delisting does not bar the Company from applying to relist on Nasdaq, or another U.S. exchange. In this regard, should the Company resolve the issues that give rise to this matter it may reapply to list on Nasdaq.

Publication Date*: 11/28/2016 Mailto Link Identification Number: 1288
material_search_footer*The Publication Date reflects the date of first inclusion in the Reference Library, which was launched on July 31, 2012, or a subsequent update to the material. Material may have been previously available on a different Nasdaq web site.
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