The troubles continue to mount at UTStarcom (NASDAQ:UTSI). This afternoon, the telecom equipment company said it has received a delisting notice from Nasdaq for not filing its 10-Q for the September quarter on time. The company has requested a hearing to appeal the notice.
As previously reported, the company has delayed filing its 10-Q to complete an internal review of its historical stock options granting practices.
Also in the release was a potentially more troubled disclosure: the company has received a defualt notice under the terms of its 7/8% convertible subordinated notes due 2008. The indenture for the notes require the company to make timely financial filings. The company has been notified by the Trustee for the notes that if the company fails to file the 10-Q on or before January 9, 2007, it would constitute an event of default and the Trustee or holders of 25% of the issue would have the right to declare the notes immediately payable.
As of the company’s 10-Q for the June quarter, the company had $274.6 million of the notes outstanding. The notes are convertible into common at $23.79 a share, far above the current stock price. At June 30, the company had $647 million in cash.
In after hours trading, UTStarcom shares are down 8 cents to $9.66.