UTStarcom (UTSI) announced that on March 20, 2006, it received a notice from Nasdaq indicating that the company is not in compliance with Marketplace Rule 4310(c) (14) because it has not yet filed its Annual Report on Form 10-K for the year ended December 31, 2005.
The notice indicated that due to such noncompliance, the company's common stock will be delisted at the opening of business on March 29, 2006 unless the company requests a hearing in accordance with the Nasdaq Marketplace Rules.
UTStarcom says it intends to request a hearing before a Nasdaq Listing Qualifications Panel to review the Nasdaq staff's determination. The hearing request will stay the delisting of the company's common stock pending the Panel's decision, however there can be no assurance that the panel will grant the company's request for continued listing.
UTStarcom says the delay in filing the 2005 Form 10-K is due to the company needing additional time to enable the Audit Committee of the Board of Directors of the company to complete an investigation with regard to the circumstances surrounding the premature recognition of revenue on a contract with a customer in India and certain other transactions and for management to complete the preparation of its 2005 consolidated financial statements and its assessment as of December 31, 2005 of the Company's internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002.
The company currently anticipates filing the 2005 Form 10-K on or about April 30, 2006.