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Atari Faces NASDAQ Delisting Over Technicality

Continued disarray amongst U.S. based publisher Atari's board of directors has now left the company in danger of having its stock delisted from the NASDAQ stock market, f...
Continued disarray amongst U.S. based publisher Atari's board of directors has now left the company in danger of having its stock delisted from the NASDAQ stock market, following the resignation of director Thomas Mitchell. The company was sent a letter by the NASDAQ on Tuesday, August 2nd stating that it was not in compliance with Marketplace Rule 4350, as it has only two board members on its audit committee, neither of whom are qualified financial experts - officially, there must be at least one financial expert, and an absolute minimum of two board members under special circumstances. Atari now has until August 17th to submit a compliance plan, before NASDAQ issues a notice of delisting. However, an unnamed Atari spokesperson has stated: "Atari will submit the requested compliance plan to the NASDAQ on or before August 17 and will promptly respond to and address any questions or concerns communicated by the NASDAQ regarding such plan." Although Atari has reported some disappointing results recently, and has also shown a relative paucity of major game releases in recent quarters, it is in no current danger of being delisted from NASDAQ because of any financial issues or problems with stock, with its share price hovering around $2.50. This particular issue has arisen after the surprise departure of CEO Jim Caparro. This led to there being only two board members on the company’s audit committee and no 'financial experts' – which is technically against NASDAQ regulations. The situation was supposed to be resolved by the appointment of David Ward to replace Caparro, but when Thomas Mitchell also resigned from the board of directors, the audit committee was again down to just two members. The sudden departure of both Caparro and Mitchell has already caused embarrassment for Atari, with Mitchell clearly unimpressed with the company's lack of intended progress in separating itself from parent company Infogrames, both financially and structurally. In a copy of his resignation letter obtained by TheStreet.com, he commented: "For the past two years, the companies have attempted to simplify the corporate structure and raise additional capital without success. Under the above circumstances, I no longer wish to serve on the board of Atari and, hereby, tender my resignation ... effective immediately."

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