The Nasdaq stock market has sent notice to SCO warning the software firm that it faces potential delisting from the SmallCap Market for failure to file required financial information.

According to Nasdaq, SCO has not complied with requirements to file its Form 10-K annual report providing a comprehensive overview of the company's business and financial condition for fiscal 2004.

US federal securities laws require that this form is completed in a timely fashion under Market Place Rule 4310(c)(14).

Nasdaq warned that, unless SCO requests a hearing on the delisting notice, its securities will be delisted from the SmallCap Market at the opening of business on 25 February 2005.

As of the opening of business on 18 February an 'E' will be appended to the end of the company's trading symbol for its securities, changing it from 'SCOX' to 'SCOXE'.

SCO stated that it will make a request for a hearing with the Nasdaq Listing Qualifications Panel to appeal against the delisting. This request will stay the procedures pending the hearing and a determination by the Nasdaq panel.

However, SCO admitted that "there can be no assurance that the Panel will grant the company's request for continued listing".

SCO issued the following statement in a bid to explain its failure to comply with Nasdaq's procedures: "The Company has been unable to file its Form 10-K for the fiscal year ended October 31 2004 because it continues to examine certain matters related to the issuance of shares of the Company's common stock pursuant to its equity compensation plans.

"The Company is working to resolve these matters as soon as possible and expects to file its Form 10-K upon completion of its analysis."