Supermicro Not Able to Regain Compliance With Nasdaq

Super Micro Computer, Inc., has notified The Nasdaq Stock Market Hearings Panel that it will be unable to meet the Panel’s August 24, 2018 deadline to regain compliance with The Nasdaq Stock Market Rule 5250(c)(1) because the company will not be able to complete and file its annual report on Form 10-K for its fiscal year ended June 30, 2017 and its quarterly reports on Form 10-Q for its fiscal quarters ended September 30, 2017, December 31, 2017 and March 31, 2018 with the SEC by such date.

As previously disclosed, by decision dated May 9, 2018, the panel granted the company’s request to continue its listing on Nasdaq’s Global Select Market through August 24, 2018, subject to the condition that the company become current with its SEC filings by that date and informs the panel the company is current with such filings.

While the company has made progress toward completing the necessary accounting review processes, it has determined that the Delinquent Reports will not be filed with the SEC by August 24, 2018.

The company is currently in the process of preparing its financial statements in light of the results of the Audit Committee investigation and other ongoing testing. A significant number of transactions remain to be reviewed. To date, none of the hundreds of reviewed transactions has involved revenue that could not ultimately be recognized, however, it has not concluded that a restatement to previously filed financial results is necessary. The company’s cumulative cash flows have not been impacted by the findings of the investigation or other testing, although the expenses associated with the investigation and testing have been significant.

The delay primarily relates to the magnitude of work that the company still must perform in order to review the company’s accounting judgments, estimates and records for transactions that occurred during fiscal years 2015 through 2017, as well as the company’s assessment and conclusions on the effectiveness of its internal control over financial reporting during such periods, so that it can complete the financial statements for the 2017 Form 10-K. Although the company has made substantial progress in these matters and committed resources and personnel toward the effort, the amount of work is substantial and the additional testing required has taken longer than anticipated. The company is committed to filing its Delinquent Reports as soon as practicable.

Charles Liang, chairman and CEO, commented: “Despite our substantial progress in these matters, we are very disappointed that we did not meet the filing deadline. We are strongly committed to completing our SEC filings as soon as possible. In addition, we continue to strengthen our internal accounting, audit and compliance functions. Additionally, our business performance remains strong and the company continues to grow. We completed our 2018 fiscal year end with a healthy balance sheet at June 30, 2018 that includes total cash, cash equivalents and short term investments of $94.1 million and bank debt of $116.2 million.”

As a result of the updated timing, the company expects that its common stock will soon be suspended from trading on Nasdaq’s Global Select Market and the panel will begin delisting proceedings. If the panel decides to delist the company’s common stock, the company will evaluate all of its options, including filing an appeal to the Nasdaq Listing and Hearing Review Council.

Following a possible suspension of trading in the company’s common stock on Nasdaq, the company expects that its shares will be quoted over-the-counter on the OTC Markets. The company intends to continue to work toward completing its Delinquent Reports, regaining compliance with its SEC reporting obligations, and regaining its listing on Nasdaq or another national stock exchange as soon as practicable.

Supermicro Received Nasdaq Letter and Response
Being not in compliance with Listing Rule 5250(c)(1)
2018.05.24 | Press Release
Nasdaq Granted Listing Extension for Supermicro
Until August 24, 2018
2018.05.11 | Press Release
Supermicro to Present Plan to Regain Compliance With Nasdaq
On April 26, 2018
2018.04.06 | Press Release
Supermicro Subject to Delisting From Nasdaq
On March 23, 2018
2018.03.19 | Press Release
Supermicro Announces Filing of Revised Compliance Plan With Nasdaq
Granting company second 180-day exception period
2018.03.02 | Press Release
Supermicro Received Extension From Nasdaq Until March 2018
To regain compliance with continued listing requirements
2017.12.14 | Press Release
Supermicro Submitted Revised Compliance Plan
With Nasdaq
2017.12.01 | Press Release
Supermicro Not in Compliance With Nasdaq
Requiring company to submit update to plan by November 30, 2017
2017.11.21 | Press Release
Supermicro Filed Compliance Plan With Nasdaq
For extension of time to regain compliance
2017.11.16 | Press Release