Ominto, operating under the name Dubli, announced on May 14, 2018, its decision to voluntarily delist from the Nasdaq Capital Market. The company cited an inability to file its required financial reports on time. This move effectively shifts Ominto's trading into the less scrutinized OTC Pink market.

Nasdaq had previously issued multiple deficiency letters to Ominto. The exchange sent warnings on January 3, February 22, and March 1, 2018. Each letter specifically flagged Ominto's failure to submit periodic reports for the fiscal year ended September 30, 2017, and for the quarter ended December 31, 2017. By mid-May, the company had still not rectified these filing delinquencies.

Ominto's press release did not explain why the financial filings never materialized. The company has a history of significant financial losses. In 2016, Ominto reported an annual loss of $10.3 million. Quarterly filings in May 2017 indicated further losses, nearing $7 million. The current delisting allows Ominto to avoid public disclosure of its full 2017 financial figures.

The delisting process moves quickly. Ominto plans to file a Form 25 with both the U.S. Securities and Exchange Commission (SEC) and Nasdaq on May 24. Trading on the Nasdaq Capital Market is expected to cease around June 1. The official delisting from Nasdaq becomes effective on June 3.

Following the Nasdaq delisting, Ominto shares will transition to the OTC Pink market, which represents the lowest tier of public stock trading. Shares are expected to begin trading under the ticker "OMNT" on the OTC Pink market starting June 4.

This transition is a common path for companies facing severe financial distress. Investopedia categorizes companies on the OTC Pink market into two groups: those that fail to meet initial listing standards for major exchanges, and those that have been delisted from established markets. Ominto falls into the latter category.

Companies on the OTC Pink market operate with significantly fewer disclosure requirements compared to those on Nasdaq or the New York Stock Exchange. This reduced regulatory oversight means less public financial information is available, making it harder for investors to assess a company's true health.

Ominto's consistent hemorrhaging of tens of millions of dollars yearly does not indicate a healthy business. Investors and Ominto affiliates should consider what management gains from moving to an exchange with thinner disclosure rules. Companies often seek less scrutiny when their financial situations are deteriorating.

Ominto's shift to the OTC Pink market, offering minimal transparency, begins on June 4.