Avid Technology, Inc. (AVID), maker of Pro Tools and other professional media systems, has announced that the company received a letter from NASDAQ stating that the Company is no longer in compliance with NASDAQ rules, which require timely filing of periodic reports with the Securities and Exchange Commission (SEC). The letter could serve as a basis for the delisting of the Company’s stock from the NASDAQ Global Select Market.
The move is a result of Avid’s Feb 25th announcement that it was indefinitely delaying fourth quarter 2012 earnings release and investor conference call, to provide time for the Company to evaluate its accounting procedures. Avid says that its primary focus has been to determine whether certain Software Updates previously thought to be only bug fixes met the definition of post-contract customer support under U.S. Generally Accepted Accounting Principles.
Avid says that it intends to submit a plan as to how it plans to regain compliance with NASDAQ’s listing requirements. The NASDAQ notice specifies that this plan has to be submitted by May 20, 2013. If the Staff accepts the Company’s plan, the Company expects to have up to 180 calendar days from the initial due date for the Form 10-K, or until September 16, 2013, to regain compliance.
While the announcement is the latest in a string of bad news for the company, Avid says it plans to continue to invest in its products; that it has no debt and ample cash to support it in these efforts; and that it is well positioned to support its customers’ ongoing success.