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.
Issues: Was the Hearings Panel correct to delist the Company under Rule 5250(c) due to its failure to timely file its periodic financial reports?
Determination: Affirm the decision to suspend and delist the Company.
As of the date of the Panel’s decision, the Company was indisputably delinquent in filing its periodic financial reports, in violation of Rule 5250(c)(1). The Listing Council noted that even if it was sympathetic to the Company’s plight and wished to
credit the Company with its success in filing the delinquent reports after the Panel reached its delisting decision, the Listing Council simply lacked authority under the Listing Rules to do so. The Listing Council concurred with Staff that Rule 5820(d)(4)
– which authorizes the Listing Council to grant an exception to Rule 5250(c) for up to 360 calendar days from the due date of the earliest delinquent filing – precluded the Council from reinstating trading of the Company’s securities on Nasdaq. October 9,
2019 – the date on which the Company filed its delinquent Annual Report for the fiscal year ended June 30, 2018 –indisputably exceeded 360 days from the initial due date of the first of the Company’s delinquent filings. As such, the Listing Council stated
that it had no choice in this instance but to affirm the Panel’s decision and delist the Company’s securities.