Safenet Gets Warned

SafeNet has a plan that, if achieved, would allow for Form 10-Q to be filed by early October

BALTIMORE -- SafeNet, Inc. (NASDAQ:SFNT), setting the standard for information security, which, as previously announced, has delayed filing its Form 10Q for the quarter ended June 30, 2006, announced today that it has in place a plan that, if achieved, would allow for this Form 10-Q to be filed by early October.

The Company also announced that it received a letter from the NASDAQ Listing Qualifications Staff indicating that the failure to timely file the Form 10-Q, as required by NASDAQ Marketplace Rule 4310(c)(14), could serve as a basis for the delisting of the Company's stock from The NASDAQ Global Select Market. The Company plans to request a hearing before a NASDAQ Listings Qualifications Panel to address the filing delay. At the hearing, the Company will present its plan to regain compliance with NASDAQ's filing requirements. The Company's common stock will remain listed on The NASDAQ Global Select Market pending the issuance of a formal decision by the NASDAQ Panel.

SafeNet hopes to remedy its filing delay before NASDAQ effects the de-listing of SafeNet's common shares, but SafeNet cannot assure that the Panel will grant a request for continued listing.

The plan would also allow the filing of a previously delayed amendment to Form 8-K containing certain financial information regarding the Company's acquisition of Eracom Technologies AG.

In addition, on August 14, 2006, the Company received a purported Notice of Default from Citibank, N.A., Trustee, under the Indenture relating to the issuance of its $250 million 2 1/2% Convertible Subordinated Notes (Notes) Due 2010, as a result of the failure to file the Form 10-Q. This purported notice of default demands that the Company cure the purported default within 60 days from the receipt of the notice of default. The Indenture provides that the trustee or holders of at least 25% of the aggregate principal amount of the Notes may accelerate repayment of the Notes if a default under the Indenture is not cured within 60 days after the Company receives notice of the default.

The Company's plan contemplates that the Company's required SEC filings would be made within such 60 day period. However, SafeNet cannot assure such filings will be made within this period.

SafeNet Inc. (Nasdaq: SFNT)

Editors' Choice
Jai Vijayan, Contributing Writer, Dark Reading
Kelly Jackson Higgins 2, Editor-in-Chief, Dark Reading