What is the reason for Discovery Communications receiving a deficiency notice from NASDAQ?

Discovery Communications received a deficiency notice because its audit committee currently has only two members, and NASDAQ Listing Rule 5605 requires at least three independent directors on the audit committee. This situation arose after the resignation of director Lawrence Kramer.

What is the deadline for Discovery Communications to regain compliance with NASDAQ's audit committee rules?

NASDAQ has provided a cure period, allowing Discovery Communications to regain compliance by the earlier of its next annual meeting of stockholders (expected in May 2013) or June 3, 2013. However, if the annual meeting occurs before November 28, 2012, compliance must be achieved by November 28, 2012.

How does Discovery Communications plan to address the audit committee non-compliance issue?

The company plans to address the non-compliance by appointing an additional independent director to its audit committee. This action is expected to bring the committee's composition back into compliance with NASDAQ's requirements.

What is the potential impact on Discovery Communications' stock listing if they fail to comply?

While the filing doesn't explicitly state the immediate consequence of prolonged non-compliance, failure to regain compliance within the cure period could ultimately lead to a delisting of the company's securities from The NASDAQ Stock Market, which would be detrimental to its investors.

WBD 8-K: Securities & Listing

Summary

Discovery Communications, Inc. (WBD) has filed an 8-K report on June 22, 2012, to address a deficiency notice received from NASDAQ on June 18, 2012. The company is currently not in compliance with NASDAQ Listing Rule 5605, which mandates that the audit committee must consist of at least three independent directors. This non-compliance stems from the recent resignation of Lawrence Kramer from the board and audit committee, reducing the committee's membership to two independent directors. Discovery Communications expects to regain compliance within the provided cure period, which extends to the earlier of its next annual meeting (anticipated in May 2013) or June 3, 2013. The company plans to appoint an additional independent director to the audit committee to rectify the situation. Investors should monitor the company's progress in appointing this new director to ensure continued listing on NASDAQ.

Key Highlights

1Discovery Communications, Inc. received a notice of deficiency from NASDAQ regarding audit committee composition.
2The company is not in compliance with NASDAQ Listing Rule 5605, which requires a minimum of three independent directors on the audit committee.
3The deficiency is due to the resignation of director Lawrence Kramer, leaving only two members on the audit committee.
4NASDAQ has granted a cure period to regain compliance, ending by the earlier of the next annual meeting (May 2013) or June 3, 2013.
5A potential earlier deadline of November 28, 2012, exists if the annual meeting is held before that date.
6Discovery Communications intends to appoint an additional independent director to the audit committee to resolve the issue.
7The company is confident in its ability to regain compliance within the specified timeframe.

Warner Bros. Discovery, Inc. 8-K Report, Listing Notice (Jun 22, 2012)

Summary

Key Highlights

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