Nasdaq issued a warning to Inspired in November over the late filing of its Q3 results. At the time, Nasdaq said Inspired could have its shares de-listed if it did not publish the figures by an agreed deadline.
Inspired said it needed more time to complete financial statements for the three months to 30 September 2023. It also said work was ongoing to restate certain previously issued financial statements.
However, Nasdaq told Inspired the late filing was in breach of Nasdaq Listing Rule 5250(c)(1). As such, Inspired was given 60 calendar days, or until 22 January 2024, to either file the form or submit a plan to regain compliance with Nasdaq Listing Rules.
The deadline date passed this week, with Inspired setting out a plan of action on 23 January.
This plan states Inspired will file the required documents no later than February 28. These filings include a Form 10-K/A for the year ended 31 December 2022, with restated financial statements, as well as Forms 10-Q/A for the quarters ended 31 March 2023 and 30 June 2023 and a Form 10-Q for the quarter ended 30 September 2023.
Inspired also plans to file its Form 10-K for the year ended 31 December 2023, by the March 2024 due date.
This, Inspired hopes, will regain compliance with Nasdaq rules. The provider added that the update has no immediate effect on the listing of the company’s securities on Nasdaq.
Why is Inspired late filing its results?
Q3 results filing season passed several months ago before the festive season, with Inspired not publishing any figures. Inspired had warned in early November it would not be releasing its results on time.
This, Inspired said, was due to a number of concerns. These include accounting errors relating to compliance with US GAAP in connection with accounting policies for capitalising software development costs. Errors mainly relate to relevant accounting standards to projects.
Inspired says errors were flagged in financial statements for financial periods commencing 1 January 2021. As such, the statements can no longer be relied upon and should be restated.
The provider added that any other statements after that date including earnings releases, press releases and investor presentations that feature financial information can no longer be relied upon.
Taking action over material weaknesses
Reviewing the case, Inspired said it has identified “material weaknesses” in internal control over financial reporting. The provider is now implementing changes to address these issues.
The restated results and new sets of figures due next month will be published in the wake of this action.
Inspired previously sought to allay investor fears over the situation. It said it does not believe the planned changes will impact its cash position or overall business plan.
Inspired’s most recent set of results, published in August, cover the second quarter and first half of 2023.
Q2 revenue was 12.3% higher at $80.1m (£63.1m/€73.7m) after growth across all business areas. Higher rise in costs pushed net profit down 85.4% to $2.3m, but adjusted EBITDA edged up to $26.2m.
As for H1, revenue was up 11.0% to $146.4m. Spending increased year-on-year, meaning net profit declined 53.6% to $3.9m for the six-month period.
Original article: https://igamingbusiness.com/legal-compliance/compliance/inspired-reveals-plan-to-regain-nasdaq-compliance/
