Thornton, Colo. — Ultimate Electronics is facing possible delisting by Nasdaq for failing to file a fully compliant earnings report.
The struggling A/V chain had notified the Securities and Exchange Commission earlier this month that its third-quarter 10-Q would be late, and filed an incomplete report on Dec. 16, one day after its extended deadline.
In a statement issued yesterday, Ultimate said it was still unable to file a fully compliant 10-Q form because the company’s independent auditors had not yet completed their work. The delay put the chain in non-compliance with Nasdaq’s rule for continued listing, although an actual delisting has been stayed pending a final determination by a Nasdaq qualifications panel.
In its preliminary 10-Q, Ultimate reported that weakening fourth-quarter sales, pending loan defaults and a demand by its major lender Wells Fargo for “significant” additional reserves could force the company to seek Chapter 11 bankruptcy protection before February.
In other Ultimate news, Mark Wattles, the founder and chief executive of the Hollywood Video chain, purchased nearly 1.5 million shares of Ultimate stock earlier this month for $1.9 million, giving him a 10 percent stake in the company. The move, paid for with personal funds, makes Wattles the second-largest shareholder behind Ultimate’s founder and chairman William Pearse. Wattles himself is engaged in a struggle to take Hollywood private while fending off a $700 million bid by Blockbuster.
Par Captial Management, an investment firm, bought another 9.2 percent stake in Ultimate this week.