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Kohlberg Capital Corporation (NASDAQ:KCAP) announced in a press release that on May 19, 2010, the Company received a Staff Determination letter from the staff of The Nasdaq Stock Market ("Nasdaq"). We quote below in full.

For those tempted not to read on, here's the summary and our conclusion: KCAP is getting close to being delisted from NASDAQ because its financial statements have not been filed due to switching to a new accountant after a dispute with the former firm. KCAP has the right to appeal and is hoping to use the time involved in that step to have the financial statements completed and save itself from de-listing.

The immediate impact on the stock listing is nil, and this will all be resolved one way or another in the next few weeks. The BDC Reporter's two cents: This is an embarrassing and possibly unnecessary episode which has left shareholders largely in the dark for months.

As previously disclosed, the Company was unable to timely file with the Securities and Exchange Commission (the "SEC") its Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 (the "Q3 2009 10-Q") and its Annual Report on Form 10-K for the year ended December 31, 2009 (the "2009 10-K"). As a result, the Nasdaq staff had previously informed the Company that it was not in compliance with Nasdaq Listing Rule 5250(c)(1), which requires Nasdaq listed companies to file on a timely basis periodic reports with the SEC. On the basis of the Company's submission of materials to the Nasdaq staff, Nasdaq had granted the Company an exception to Nasdaq Listing Rule 5250(c)(1) allowing the Company until May 17, 2010 to regain compliance with that rule by filing the Q3 2009 10-Q and the 2009 10-K by that date. The Company was not able to meet the terms of the exception. Also as previously disclosed, the Company was unable to timely file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 (the "Q1 2010 10-Q").

The May 19, 2010 Staff Determination letter stated that, because the Company did not meet the terms of the exception by filing the Q3 2009 10-Q and the 2009 10-K by May 17, 2010, unless the Company requests a hearing to appeal the Staff Determination letter by May 26, 2010, trading of the Company's common stock will be suspended from The Nasdaq Global Select Market at the opening of business on May 28, 2010 and, thereafter, Nasdaq will file a Form 25-NSE with the SEC, which would remove the Company's common stock from Nasdaq. The Staff Determination letter cited the Company's inability to timely file the Q1 2010 10-Q as an additional basis for suspending and delisting the Company's common stock from Nasdaq.

The Company intends to request a hearing to appeal the Nasdaq staff's determination to a Hearings Panel. Hearings are typically scheduled to occur approximately 30-45 days after the date of the hearing request. The Company's request for a hearing regarding its delinquent filings will automatically stay the suspension of the Company's common stock for a period of up to 15 days from the deadline to request a hearing. The Hearings Panel will review the request for an extended stay and notify the Company of its decision as soon as practicable but in no event later than 15 days following the deadline to request a hearing. In the event the Hearings Panel determines not to grant the Company's request for an extended stay, the Company's common stock will be immediately suspended and will remain suspended unless the Hearings Panel decision issued after the hearing determines to reinstate the listing of the Company's common stock on Nasdaq.

The Company currently expects to file the Q3 2009 10-Q, the 2009 10-K and the Q1 2010 10-Q before the date of the hearing before the Hearings Panel.

The Staff Determination letter has no effect on the listing of the Company's common stock at this time.

Disclosure: No position in KCAP

Source: Kohlberg Capital Close to Nasdaq Delisting