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i2 delays filing; shares halted

The software maker's decision to delay filing its 2002 annual report form with government regulators could cause the company to be delisted from the Nasdaq.

Shares of i2 Technologies were halted from trading on the Nasdaq Stock Market on Monday after the software maker's decision to delay filing its 2002 annual report form with government regulators amid accounting investigations.

i2 said it expects it could be delisted from the Nasdaq for its failure to file on time.

Nasdaq halted trading of i2's shares at a last sale price of 79 cents per share at 11:00 a.m. on Monday. Trading will remain halted until the Dallas, Texas-based software company provides the stock market with "additional information" it has requested, Nasdaq said in a statement.

In addition, i2 said on Monday that it will delay filing of its 10-K regulatory form to the Securities and Exchange Commission and that it has become the subject of a formal SEC investigation over allegations of improper accounting at the company. Earlier this year, i2 said the SEC had launched an "informal inquiry" into the matter.

The company, which sells software designed to help manufacturers cut inventory costs and operate more efficiently, also said it has expanded its re-auditing probe to include financial statements from 1999, in addition to those from 2000 and 2001. The company began to re-examine its books in January after investigating earlier claims made by two former executives that i2 hadn't properly accounted for revenue related to a number of customer contracts and may have committed fraud.

i2 also said that it believes it will need to make material adjustments to previously reported financial results and that investors shouldn't rely on financial information contained in a number of its annual and quarterly regulatory filings. I2 said it hopes to complete the re-audits by June.

i2 competes with SAP, Oracle, JD Edwards and Manugistics in the so-called supply-chain software market. Though business has declined for most of these companies over the last couple of years, the high-tech market contraction has sent i2 into an upheaval. It began when the company became the focus of stinging criticism from customers who struggled to make its software work. The negative publicity, followed by a series of layoffs and management changes, has sent the firm into a downward spiral, analysts have said.