As noted in October, EFI is conducting a review of their stock option grant practices. Since the review remains ongoing, EFI said yesterday that it will delay the filing of its Form 10-Q. The company also said the Securities and Exchange Commission (SEC) sent a letter of informal inquiry asking EFI to voluntarily provide documents and information related to its stock option practices. EFI intends to fully cooperate with the SEC.

As a result of the filing delay of its Form 10-Q, EFI is in violation of both Nasdaq listing requirements and the lending terms covering some of its debt.

EFI plans to request a hearing before the Nasdaq Listing Qualifications Panel. EFI's common stock will remain listed pending a decision by the hearing panel.

EFI is also in "compliance deficiency” with its $240 million, 1.5 percent senior convertible notes according to the trustee. This could make EFI repay the debt on an accelerated schedule. The company has over $500 million of cash and says this cash position is adequate if forced to pay.