2. Feb 15 SCOX is now officially late by NASDAQ rules.

   3. Feb 16 SCOX receives a delisting warning from NASDAQ.

   4. Feb 17 SCOX issue the required press release announcing the NASDAQ letter and their intention to appeal and file a form 8-K with the SEC concerning the material event.

   5. Feb 18 SCOX(E) begins trading under their new symbol when the market opens.

   6. Feb 24 SCOXE file their appeal. Subsequent dates are calculated from this date, so they'll file as late as possible.

   7. Mar 1  Around this time SCOXE will get a letter from NASDAQ setting the date for a hearing in Washington D.C. and a filing deadline for the required information about the causes for the delay and what remedial action has been and will be taken. The required information is extensive and generating it all at the same time they're trying to solve the problem will be a strain. They have to say how and when they discovered the problem, list all the meetings held and actions taken about it and completely describe the problem, naming names and the resulting sanctions. They also have to say what the procedural flaw was that let this happen, what they've done to fix it, what the accountants recommended that they didn't do, and whether anybody official is investigating the company (like the SEC).

   8. Mar 28 (or earlier) SCOXE have their hearing. This is 30 days by NASDAQ rules - the resulting date has to be a business day. The rules say "usually within 30 days" but the delisting crunch from the tech bust seems to have slowed down, so it probably will be within 30 days. SCOXE can have an oral hearing or just submit paperwork. They'll spend the extra $1000 for the oral hearing, because they are allowed to submit extra documentation at the hearing, and they'll need all the time they can get. The hearing will be held by 2 members of the "business community" chosen from a NASDAQ pool. Since NASDAQ doesn't say they are chosen randomly, I suspect they'll both be accountants, and at least one will be a former or current CFO. NASDAQ officials usually don't attend. They submit "their position" in writing to the panel in a "Hearings Memorandum". They may "choose to attend" in "certain circumstances". This doesn't sound like their doing so would be a good sign.

   9. Apr 21 (very roughly, NASDAQ says within "several weeks") SCOXE gets the results of the hearing. These results are not made public. There could be an immediate delisting, but the more likely case is a conditional listing with milestones for compliance.  Companies seem to have latitude about how much of this information is material and requires disclosure. Companies in the past have remained silent until the final triumphant announcement that they have satified NASDAQ, or until the delisting announcement that they haven't.

  10. May 1  One or more scapegoats resign. Because NASDAQ require the naming of names and the placing of blame, anyone who was seriously derelict will have to go, to show good faith concerning the workout plan. Bert Young probably hasn't been around long enough, but the members of the audit committee have exposure. Skousen and Campbell are the financial experts, so they would be the most responsible. Of course it might be just an "honest mistake", but it would play better if they axed somebody. If the SEC decide to investigate, the 8-K announcing this would probably show up around this point.

  11. Jun 23 (or so) SCOXE conference call, (assuming no immediate delisting). Dion Cornett will ask Darl what's going on with NASDAQ. He'll defer to Bert Young (assuming his sins have yet to catch up with him), who will tap dance.

It doesn't look like the delisting process is much of a threat to SCOXE. What could be more serious is what the investigation discovers. The market hates earnings restatements, particularly if they involve multiple years. These have to be disclosed as soon as the need is discovered. You can't wait until the next 10-Q and just slip it in. Once one is announced, investors have learned from experience, you often get another one or some other bad news.

Failing this, I expect that their court cases will kill them faster than NASDAQ. The real danger for SCOXE is that all the turmoil accelerates their customers' stampede for the exit. Their strategy is to keep SCOXE cashflow neutral by saving money from firing people faster than they lose money from customers bailing. At some point it will become obvious even to the most obtuse that they can't expect SCOXE to support the product. It's likely most of them have already figured that out; they're probably just waiting until they've ported their applications and their contracts are up.

If IBM is successful in making SCOXE pay for their discovery (there's case law supporting this), and SCOXE have no cash to add to the $5 million expense escrow, they're dead. Only Canopy might give them more money, and Canopy is currently preoccupied with other matters.