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BakBone Slapped in Toronto

Shares of BakBone Software Inc. (Toronto: BKB) won't be traded for 15 days on the Toronto Stock Exchange, following an order issued today by the Alberta Securities Commission (ASC) (see Alberta Halts BakBone).

The commission announced the halt in trading because BakBone missed the November 15 deadline for filing results of the quarter ended in September with the U.S. Securities and Exchange Commission. If BakBone doesn't file its report by December 17, the commission will consider further action.

BakBone blames a recent change in auditors for the late filing, although its accounting problems began in May (see BakBone Slip Called Temporary and Bakbone Reports Restated). That's when BakBone shareholders gave the board approval to enact a reverse stock split anytime until May 2005 at up to a 5-to-1 ratio (see BakBone Calls a Reverse). The goal was to reduce the number of shares and raise the stock price to $5.00 so BakBone could get listed on Nasdaq.

But in late May, the company said it did not properly take into account deferred stock-based compensation charges when it reconciled from Canadian GAAP to U.S. GAAP.

Events began to snowball. Bakbone performed poorly in the quarter that ended in June, losing $1 million on revenue of $7.9 million. That was the last period for which the company filed a quarterly report. In early October, auditor KPMG abruptly quit without explanation. BakBone hired Deloitte & Touche LLP as its new auditor on October 25 (see BakBone Gets New Head).

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