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Avid receives compliance notice from NASDAQ

Due to the company’s delay in the filing of its annual report, Avid has received a notification letter from NASDAQ stating it is no longer in compliance with marketplace rules.

Avid has announced that it has received a notification letter from staff of the NASDAQ Listing Qualifications Department stating that it is no longer in compliance with marketplace rules. The notice was sent following standard NASDAQ procedure, which says that failure to file annual reports (Form 10-K) in a timely manner could serve as a basis for delisting a company’s stock. Avid says the notice came “as expected:” In late February Avid postponed the release of its Q4 and annual earnings reports.Since then, over a dozen American law firms have launched investigations into potential claims against the company on behalf of shareholders. In today’s statement Avid says “it is continuing to evaluate the accounting treatment related to bug fixes, upgrades and enhancements in certain of the Company’s customer arrangements (collectively, “Software Updates”). The primary focus of the Company’s evaluation to date 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. The Company is working diligently to complete the review and continues to focus its efforts on completing the Form 10-K filing as soon as possible.” Avid has until 20 May to submit a plan to NASDAQ as to how it plans to regain compliance with listing requirements. If the plan is accepted, Avid has until mid-September to release its earnings reports. The NASDAQ notice has no immediate effect on the listing of Avid stock.