Codere Online Responds to Nasdaq Delisting Notice with Compliance Commitment by May 30
Codere Online is currently contesting a delisting notice issued by the Nasdaq due to the company’s failure to file its 2024 annual report promptly.
On May 16, Nasdaq issued a “staff determination letter,” alerting Codere of the intent to delist from the exchange. This action comes after the operator experienced delays in filing its 2024 Form 20-F, attributed to an extended audit process involving its newly appointed independent registered public accounting firm, MaloneBailey LLP. Codere only began its association with MaloneBailey on December 31.
In response, Codere has requested a hearing to address this matter, a process that typically occurs within 30 to 40 days following the notice. The company remains hopeful, stating it anticipates filing its 2024 annual report with the SEC by May 30.
During the ongoing review, if Nasdaq grants a stay on the suspension of trading, Codere can continue its operations. The operator has submitted documentation supporting its case for remaining on the exchange but is awaiting a decision regarding any suspension.
Should Nasdaq decline to grant the requested extension, Codere may face a suspension of trading starting June 6.
Ongoing Compliance Efforts
This isn’t the first time Nasdaq has raised compliance concerns regarding Codere Online. A delisting threat was issued in November due to prior lapses in SEC reporting requirements. After receiving an extension from the Nasdaq hearings panel in January, Codere managed to meet the April 12 deadline for its prior annual report, filing it on May 1.
However, failing to comply with the rules surrounding the 2024 report has led to the current delisting predicament. "We will appeal the latest delisting decision and request both a new hearing panel and a further stay on the trading suspension," said CEO Aviv Sher on May 16, reassuring investors of the company’s intent to file the necessary documentation by the end of May. This proactive approach is seen as essential for regaining compliance with Nasdaq’s listing conditions ahead of the hearing.
In a notable operational shift, Codere Online transitioned its independent registered public accounting firm to MaloneBailey LLP following the exit of Marcum LLP, which resigned on December 20, 2023. Marcum cited its inability to complete certain audit procedures due to IT control deficiencies linked to third-party supplied platforms and a lack of adequate internal controls at Codere.
Marcum had succeeded Ernst & Young, SL, which opted out of reappointment in 2023.
In its most recent Q1 update, Codere reported a net gaming revenue of €57 million ($63.9 million) for the quarter ending March 31, representing an 8% increase from €53 million in the previous year. This upward trend underscores the operator’s potential for recovery as it navigates these regulatory challenges.