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As previously disclosed in its Form 20-F, filed on March 31, 2011, the audit committee of CryptoLogic Limited (TSX: CRY)(TSX: CXY)(NASDAQ: CRYP)(LSE: CRP) (the "Company") comprises only two members, following David Gavagan's appointment as Interim Chief Executive Officer on August 12, 2010 (as a result of which appointment he resigned from the audit committee as he ceased to be considered independent under NASDAQ Listing Rules). The Company previously reported to NASDAQ that the audit committee currently comprises only two members.
On May 19, 2011, the Company received a NASDAQ Staff Deficiency Letter that, as a result of Mr. Gavagan's resignation from the audit committee, the Company no longer complies with NASDAQ's audit committee requirements as set forth in NASDAQ Listing Rule 5605(c)(2), which requires that the audit committee be composed of at least three independent directors.
Pursuant to NASDAQ Listing Rule 5605(c)(4), in order to regain compliance, the Company has been provided with a cure period until the earlier of the Company's next annual shareholders' meeting or August 12, 2012. The Company's board of directors intends to propose a candidate to fill the vacancy on the board of directors at the next annual shareholders' meeting, who will be appointed to the audit committee upon election. Elections to the Company's board and committee appointments will be announced in a subsequent filing.
In addition, on May 19, 2011, the Company received a second NASDAQ Staff Deficiency Letter (the "Second Letter") that, as a result of Mr. Gavagan's appointment as Interim Chief Executive Officer, the Company became non-compliant with NASDAQ Listing Rule 5605(d), as the remuneration committee no longer consisted solely of independent directors. On May 9, 2011, prior to the Second Letter, however, Mr. Gavagan had resigned from the remuneration committee and the Company therefore regained compliance with NASDAQ Listing Rule 5605(d). NASDAQ has notified the Company that the matter is now closed.
