The gaming technology company Inspired Entertainment has outlined a detailed plan for regaining compliance with the US stock exchange Nasdaq.
Nasdaq warned Inspired about the late submission of Q3 results in November. Nasdaq warned that Inspired’s shares could be delisted if they did not meet the deadline.
Inspired stated that it needs more time to finish financial statements covering the period ending 30 September 2023. The company also stated that it was working to restate some financial statements previously released.
Nasdaq informed Inspired that the late filing violated Nasdaq Listing Rule (5250(c).1) Inspired had 60 days or until the 22nd of January 2024 to file or to submit a plan for regaining compliance with Nasdaq Listing Rules.
Inspired’s plan for action was released on the 23rd of January, which marked the end date.
In this plan, Inspired states that it will submit the necessary documents by February 28, 2019. This plan states that Inspired will file the required documents no later than February 28.
Inspired plans to also file its Form 10K for the fiscal year ending 31 December 2023 by the deadline of March 2024.
Inspired believes that this will help them to regain Nasdaq compliance. This update will not have an immediate impact on Nasdaq’s listing of company securities, according to the provider.
What is the reason for late submission of results by Inspired?
Inspired has not published any numbers for Q3 filings. Inspired warned early in November that it wouldn’t be releasing results by the deadline.
Inspired explained that this was because of a variety of reasons. Accounting errors related to US GAAP and accounting policies used for capitalising costs of software development are among them. The errors are mainly related to the relevant accounting standards for projects.
Inspired reports that errors have been flagged on financial statements of financial periods beginning 1 January 2021. The statements should therefore be re-stated as they can no longer be trusted.
The provider said that after this date, any statements including press releases or investor presentations which include financial data cannot be trusted.
Take action against material weakness
Inspired, after reviewing the case it received, said that “material weaknesses” were identified in its internal controls over financial reporting. This provider has now implemented changes to resolve these problems.
This action will result in the publication of restated and revised results, as well as new figures for next month.
Earlier, Inspired sought to calm investor concerns. The company said that it did not expect the changes to have a negative impact on its business or cash flow.
The most recent results published by Inspired in August cover the first and second halfs of 2023.
After growth in all areas, Q2 revenues were 12.3% higher ($80.01m (PS63.1m/EUR73.7m). Net profit fell 85.4%, to $2.3m. Adjusted EBITDA increased to $26.2m.
In H1, revenues increased 11.0%, to $146.4m. The net result for H1 was $3.9m, a 53.6% decline from the previous year.
