Novell has confirmed the receipt of a notice from the Nasdaq stock market warning that its shares will be delisted from the exchange after the software company delayed filing its most recent quarterly report to the US Securities and Exchange Commission (SEC).
The vendor will appeal the decision and request a hearing before a Nasdaq listing qualifications panel. That move will automatically stay the delisting of Novell's stock while the panel reviews the appeal. In order to ensure continued listing on Nasdaq, the exchange requires companies to file their financial reports with the SEC on a timely basis.
Novell was supposed to file its Form 10-Q report for its third quarter of fiscal 2006 to the SEC earlier this month.
Last week, Novell announced a delay in the filing as it waited for the results of a voluntary internal review around the granting of stock options to employees. The company intends to file its 10-Q as soon as the review is complete, but has yet to commit to when that process will end. Novell has warned the review may require it to restate earnings.
Novell isn't the only IT vendor in hot water with Nasdaq. Dell plans to request a hearing before a Nasdaq listing qualifications panel after the exchange informed the vendor in a letter dated September 15 that it was not in compliance with filing requirements.
Dell has delayed the filing of its latest 10-Q report for the quarter ended August 4. The vendor said it was unable to file its 10-Q due to questions raised by an informal investigation by the SEC into unspecified accounting and reporting matters at the company. Along with the SEC investigation and an internal review by Dell's audit committee, the US Attorney for the Southern District of New York has subpoenaed documents relating to Dell's financial reporting from 2002 to the present.
While the Nasdaq panel deliberates on Dell's fate, the vendor's shares will remain listed on the exchange.