The Lindon software company - best known for its $5 billion lawsuit against IBM involving rights to the Linux operating system - appeared before Nasdaq's Listing Qualifications Panel in Washington, D.C., on Thursday morning in an attempt to stave off threatened delisting.
Noting SCO repeatedly failed to file its 2004 fiscal year earnings, or 10-K, report with the Securities and Exchange Commission, the exchange notified SCO it would be delisted as of Feb. 25. The company instead appealed, delaying the action - although the "E" alert to investors still was added to the company's former SCOX symbol.
Nasdaq spokesman Wayne Lee said exchange rules prohibited him from discussing the closed-door hearing. SCO spokesman Blake Stowell said Nasdaq did not render a decision immediately, and did not indicate when it would rule.
"We presented our reasons for not filing the form 10-K on time - reasons that have been explained publicly through our press releases," Stowell said. "Our plan remains to get [the 10-K] done very soon."
If the appellate panel decides to proceed with delisting, Nasdaq rules allow SCO to appeal once more to the Nasdaq Listing and Hearing Review Council. However, that second appeal would not halt the delisting itself, only seek to overturn it.
SCO came under Nasdaq scrutiny when it failed to meet Jan. 31 and Feb. 15 deadlines for the year-end report. On March 3, the company filed a special 8-K report with the SEC, acknowledging accounting problems were behind both delays, along with a need to restate portions of the first three quarters of 2004.
Shareholders must wait for the overdue 10-K, and 2005's first quarter report, to realize the full impact of the planned restatements. SCO has said already, however, that it will reclassify $1.06 million "related to certain shares of common stock that the company may have issued under its equity compensation plans without complying with the registration requirements of federal and applicable state securities laws."
SCO also plans to reclassify some $2.5 million in accrued dividends from preferred stocks in the first and second quarters of last year, and will restate $233,000 of stock-based compensation expense related to the same period.
SCO's stock closed Thursday at $3.79 per share, up 10 cents.
bmims@sltrib.com
