Episode 56 (we've lost count) in the Digiliti Money saga

Episode 56 (we’ve lost count) in the Digiliti Money saga

Digiliti Money (DGLT), which is in merger negotiations with Urban FT, is planning to delist from the Nasdaq, according to its most recent SEC filing.

Paybefore (Banking Technology‘s sister publication) reports that the Minneapolis-based mobile banking technology provider said it received notice from Nasdaq’s Listing Qualifications Department indicating its noncompliance with the stock market’s majority independent board requirement and continued listing standards.

The notice of noncompliance is based on the company’s failure to: 1) timely file its quarterly report on Form 10-Q for the period ended 30 June 2017; and, 2) comply with Nasdaq’s majority independent board requirement and the audit committee, compensation committee and nominating committee composition requirements, the company says.

DGLT previously disclosed the departure of four directors from the board in SEC filings dated 1 and 7 September 2017. Robin O’Connell, James Spencer, Darin McAreavey and Brittney McKinney all left the board for “personal reasons,” according to the filings.

The company had until 20 September 2017, to submit a plan to Nasdaq outlining its proposed actions to regain compliance with the continued listing standards. Instead, the board determined that, while regaining compliance with some of the requirements could be cured promptly, others would require significant funds and resources.

“The board has also determined that allowing the delisting of the company’s stock from Nasdaq would actually facilitate financing, M&A and corporate restructuring opportunities that would otherwise be more time-consuming and costly to complete while on Nasdaq. As a result, the board believes that it is in the best interest of the company to delist from Nasdaq to facilitate its current restructuring plans,” DGLT says.

If the company is delisted from Nasdaq, it plans on applying for listing on one of the OTCQB, QX or PK markets once it satisfies the appropriate financial reporting and other listing qualification requirements.

As previously reported, DGLT had announced the delay of its Q2 earnings report after it launched an internal investigation following the resignation of its auditing firm.

A 14 September SEC filing shows that the company has hired Wei Wei & Co., an independent member of BDO Alliance USA, as its new independent registered public accounting firm, to perform independent audit services for the fiscal year ending 31 December 2017, and to re-audit the company’s financial statements for the fiscal year ended 31 December 2016.

Urban FT CEO Richard Steggall told Paybefore earlier this month that he anticipated closing a deal with DGLT on or around 29 September.