Dell Buys Time From Nasdaq On Delisting

However, Dell said it didn't think it could meet the conditions but would ask for more time.

Dell is delinquent in two mandatory quarterly reports with the Securities and Exchange Commission, which puts the Round Rock, Texas-based company in violation of Nasdaq rules for listing on the exchange. Dell has previously said Nasdaq had warned it that it faced expulsion from its listing service.

"The company must provide Nasdaq with certain information regarding the previously announced Audit Committee investigation by March 1, 2007, and file its delinquent periodic reports, along with any required restatements of prior financial statements, by March 14, 2007," Nasdaq said in a filing with the SEC.

In a separate press release, Dell said that although it thought it could meet the first condition, meeting the second one isn't a sure thing.

Sponsored post

"The company is working diligently to file the delinquent reports with the SEC as soon as possible but does not expect that it will be able to do so by March 14," Dell said in the statement. "The company plans to ask the Nasdaq Listing and Hearing Review Council for additional time to file these periodic reports, but there can be no assurance that the council will grant the company's request."

By giving Dell until March 14 to comply with Nasdaq regulations, the exchange is allowing the PC maker the maximum 180 days from its initial notice of delisting to come back into compliance. Under Nasdaq rules, a hearing committee that oversees Dell's appeals process can grant no extensions beyond the 180 days.

According to Nasdaq listing requirements, an initial threat of delisting can be appealed to Nasdaq's Listing and Qualifications Hearings Panel, which can stay a delisting. But Nasdaq rules also state the following: "Members of the panel are independent of Nasdaq and are appointed by Nasdaq's board of directors. The panel has the discretion to grant the company additional time to remain listed, provided the company has a specific plan to regain compliance and is taking appropriate steps to deal with the circumstances which caused the delinquency. The panel may not, however, grant an extension which would exceed the earlier of 90 days from the date of its decision or 180 days from the date of the staff delisting notification."

Nasdaq first notified Dell that it faced delisting on Sept. 15.

A Dell spokesman, asked about NASDAQ's limits for staying a delisting, pointed to the statement in the company's press release. "We are going to ask for more time from the review council," the spokesman said.

NASDAQ spokesmen were not immediately available for comment.

Dell has said it has been unable to file financial reports with the SEC because of the complexity of figuring out its final earnings reports for its last two quarters. At the same time, Dell has been under investigation by the U.S. Attorney for the Southern District of New York and the SEC, and the company has said investigators are looking into potential accounting and reporting irregularities. Federal prosecutors have subpoenaed Dell records going back to 2002.

Updated at 6:36 p.m. Eastern Time with comment from Dell.