Filing Delinquency

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 5820(d)(4): In the case of a Company that fails to file a periodic report (e.g., Form 10-K, 10-Q, 20-F, 40-F, or N-CSR), the Listing Council may grant an exception for a period not to exceed 360 days from the due date of the first such late periodic report. The Company can regain compliance with the requirement by filing that periodic report and any other delinquent reports with due dates falling before the end of the exception period. In determining whether to grant an exception, and the length of any such exception, the Listing Council will consider the Company's specific circumstances, including the likelihood that the filing can be made within the exception period, the Company's past compliance history, the reasons for the late filing, corporate events that may occur within the exception period, the Company's general financial status, and the Company's disclosures to the market. This review will be based on information provided by a variety of sources, which may include the Company, its audit committee, its outside auditors, the staff of the SEC and any other regulatory body.

Issue:  At issue is whether the Listing Council has discretion to allow a company to remain listed notwithstanding that it has been and remains delinquent in filing its periodic financial reports beyond the end of the 360-day exception period.

Determination:  Affirm the decision to delist the Company.

As of the date of the Panel’s decision (and thereafter), the Company was indisputably delinquent in filing its periodic financial reports, in violation of Rule 5250(c)(1). Rule 5815(c)(1)(F) provides that the extent of the Panel’s discretion to grant a company an exception to Rule 5250(c) is 360 calendar days following the due date of a company’s first delinquent periodic report, and that a company may regain compliance with the Listing Rule only by filing its delinquent reports before the end of the exception period. In this instance, the Company requested and received from the Panel the full 360 day exception period within which to regain compliance. The Panel had no choice under Rule 5815(c)(1)(F) but to delist the Company’s securities.

Pursuant to Listing Rule 5820(d)(4), the scope of the Listing Council’s discretion to grant an exception to the Company is co-extensive with that which was available to the Panel under Rule 5815(c)(1)(F). As such, even if the Listing Council was sympathetic to the Company’s plight and wished to grant it further time to regain compliance, the Listing Council also had no choice in this instance but to affirm the Panel’s decision and delist the Company’s securities.

In this instance, Listing Rule 5820(d)(4) specifically limits the scope of the Listing Council’s authority to grant the Company an exception to regain compliance with the periodic filing requirement of Rule 5250(c)(1). Listing Rule 5820(d)(4) provides the outer boundary of the Listing Council’s discretion. The Council presumed that the Exchange intended to impose a specific limit on the Listing Council’s authority to grant exceptions where a company is delinquent in filing its periodic financial reports, and interpreted Listing Rule 5820(d)(4) accordingly.