Super Micro Computer (SMCI) has terminated its loan agreements with Cathay Bank and Bank of America. This move effectively eliminates the December 31st deadline for submitting its delayed financial statements, a requirement under the original loan covenants.
SMCI has been facing scrutiny since August, delaying its annual report filing after allegations of accounting fraud by Hindenburg Research. The Nasdaq exchange warned of potential delisting if the report wasn't filed by November 16th. SMCI submitted a compliance plan on November 18th, which Nasdaq is currently reviewing.
The loan termination, announced in an SEC filing, removes the immediate pressure to release financial statements. The company stated:
On November 20, 2024...Super Micro Computer, Inc. (the “Company”) prepaid in full and terminated its obligations under each of (i) the Loan Agreement...with Cathay Bank...and (ii) the Loan and Security Agreement with Bank of America N.A....
While SMCI's share price rallied recently on hopes of Nasdaq compliance, the termination of the loan agreements suggests a further delay in the release of its financial statements. SMCI shares closed down approximately 10% today, though they are still up around 25% over the past five trading days.