ShengdaTech: ‘Business as usual’ while Nasdaq delisting is appealed
Nano-precipitated calcium carbonate manufacturer ShengdaTech, Inc. reports its business operations will continue to be conducted as usual during its appeal against the delisting determination issued by The Nasdaq Stock Market LLC’s Listing Qualifications Department. The appeal, ShengdaTech reports, has temporarily stayed the delisting pending a hearing on the matter on May 26. ShengdaTech acknowledges there is no assurance its appeal for continued listing will be granted and even goes as far as admitting that, should it be granted, it can not assure it will “be able to execute upon such request in a timely manner or to the satisfaction of Nasdaq.” Should the Nasdaq confirm the delisting determination, ShengdaTech’s securities will be subject to imminent delisting from Nasdaq and will be quoted for trading in over-the-counter securities markets.
On April 16, 2011, the Company received a letter from Nasdaq stating that the Company’s failure to file its Form 10-Q for the period ended March 31, 2011 with the Securities Exchange Commission and Nasdaq serves as an additional basis for delisting the Company’s securities from The Nasdaq Stock Market under Nasdaq Listing Rule 5810(b). ShengdaTech states it intends to address this matter pursuant to the said rule at its appeals hearing.
In addition, an internal ShengdaTech committee consisting of three Board members is investigating “serious discrepancies and unexplained issues” relating to the company and its subsidiaries’ financial records as identified by its former accounting firm KPMG in the course of its audit of the consolidated financial statements for the fiscal year ended December 31, 2010. ShengdaTech has begun implementing a cash control validation plan established by the committee; the company says it is also in the process of evaluating potential independent registered public accounting firms to replace KPMG and intends to become compliant with its reporting obligations as soon as practicable.