Novell Receives Delisting Notice from NASDAQ and Notice of Default from Wells Fargo Related to Its Convertible Subordinated Notes
WALTHAM, Mass.
20 Sep 2006
Novell, Inc. (NASDAQ: NOVL) today announced that it had received a staff determination notice from the NASDAQ Stock Market stating that the company's common stock is subject to delisting from the NASDAQ Stock Market. The notice was issued in accordance with standard NASDAQ procedures as a result of the delayed filing of Novell's quarterly report on Form 10-Q for the period ended July 31, 2006. Timely filing of periodic reports is a requirement for continued listing under NASDAQ marketplace rule 4310(c)(14).
Novell will appeal and request a hearing before a NASDAQ listing qualifications panel, which will automatically stay delisting of the company's common stock pending the panel's review and determination.
The late filing resulted from Novell's previously announced voluntary review by its audit committee of Novell's historical stock-based compensation practices. The company intends to file its quarterly report on Form 10-Q for the period ended July 31, 2006 as soon as practicable after the audit committee's review is concluded.
Novell also announced today that it had received a letter from Wells Fargo Bank, N.A., the trustee with respect to Novell's $600 million 0.50% convertible senior debentures due 2024, which asserts that Novell is in default under the indenture because of the delay in filing its Form 10-Q for the period ended July 31, 2006. The letter states that this asserted default will not become an "event of default" under the indenture if the company cures the default within 60 days after the date of the notice.
Novell does not believe that it has failed to perform its obligations under the indenture. Therefore, Novell believes that the above-mentioned notice of default is invalid and without merit. Novell's indenture requires that it provide the trustee copies of all SEC filings within 15 days after such filings are actually made. Novell will comply with this requirement by providing the Form 10-Q for the period ended July 31, 2006 to the trustee after filing it with the SEC.
In the event the above-mentioned notice of default is not invalid, and in the event such default were to mature into an event of default under the indenture, the trustee or the holders of at least 25% in aggregate outstanding principal amount of debentures may accelerate the maturity of the debentures.
Legal notice regarding forward-looking statements
This press release includes statements that disclose Novell's or management's intentions,
expectations or predictions of the future, including statements about claims of
default with respect to Novell's 0.50% convertible senior debentures due 2024 and
potential consequences are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act. Novell cautions that these statements
involve risks and uncertainties and other factors that may cause results to differ
materially from those anticipated at the time such statements are made. In addition,
potential risks and uncertainties include, among other things: (1) the results of
the review of Novell's historical stock-based compensation practices and the related
potential accounting impact; (2) the timing of the completion of such review by
the audit committee and the independent outside legal counsel engaged by the audit
committee to conduct the review; (3) any potential restatement and filing of previously
issued financial statements and assessment of the effectiveness of disclosure controls
and procedures and internal control over financial reporting; (4) the review and
filing of Novell's Form 10-Q for the fiscal quarter ended July 31, 2006; (5) the
possibility that the occurrence of an event of default under the indenture could
cause acceleration of repayment of the entire principal amounts and accrued interest
on the debentures; (6) the possibility that the NASDAQ listing qualifications panel
may not grant Novell's request for an extension to regain compliance with NASDAQ
listing qualifications or Novell's failure to regain compliance within any extension
period that is granted, in which case Novell's common stock would be delisted from
the the NASDAQ Stock Market; (7) any adverse results of lawsuits or governmental
inquiries; and (8) additional risks and uncertainties and important factors described
in Novell's filings with the SEC, including our most recent annual report on Form
10-K. There can be no assurance that the outcome of the review by Novell's audit
committee of Novell's past stock-based compensation practices and the related potential
accounting impact will not result in changes in the preliminary financial results
for the third fiscal quarter 2006 or a restatement of financial results provided
by the company for any historical period. Although we believe the expectations reflected
in such forward-looking statements are based upon reasonable assumptions, we can
give no assurance that our expectations will be attained or that results will not
materially differ. We undertake no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise, except
as may be required by law.
About Novell
Novell, Inc. (Nasdaq: NOVL) delivers Software for the Open Enterprise™. With more than 50,000 customers in 43 countries, Novell helps customers manage, simplify, secure and integrate their technology environments by leveraging best-of-breed, open standards-based software. With over 20 years of experience, more than 5,000 employees, 5,000 partners and support centers around the world, Novell helps customers gain control over their IT operating environment while reducing cost. More information about Novell can be found at http://www.novell.com.
Novell Receives Delisting Notice from NASDAQ and Notice of Default from Wells Fargo Related to Its Convertible Subordinated Notes