Did you test your gambling habits yet?

Join

THE GAMALYZE CHALLENGE

Inspired Entertainment Announce Strategic Plan to Ensure Nasdaq Compliance

Listen to this news articleLISTEN TO THIS ARTICLE:

Inspired Entertainment, a leading supplier of gaming technology, has explained how it intends to address compliance concerns with the US stock exchange, Nasdaq. The move is the result of a cautionary notice issued from Nasdaq in November regarding Inspired’s delay in submitting its Q3 financial results. Nasdaq explained that Inspired could have its shares de-listed if the company failed to present the required financial data by a prearranged deadline.

Inspired explained that it needed additional time to finalize its financial statements for the quarter ending September 30, 2023. The company also indicated that efforts were underway to amend certain financial statements previously issued.

Despite these efforts, Nasdaq pinpointed the delay as a violation of its Listing Rule 5250(c)(1). Consequently, Inspired was allotted a 60-day period, concluding on January 22, 2024, to either submit the overdue financial form or present a plan to rectify the compliance issues with Nasdaq’s regulations.

Upon the expiration of this deadline, Inspired unveiled a remedial plan on January 23. The company committed to submitting the mandated documents by February 28, including a restated Form 10-K/A for the fiscal year concluding on December 31, 2022, Forms 10-Q/A for the quarters ending March 31 and June 30, 2023, and a Form 10-Q for the quarter concluding on September 30, 2023.

Additionally, Inspired intends to file its Form 10-K for the fiscal year ending December 31, 2023, by the due date in March 2024. The company remains hopeful that these steps will realign it with Nasdaq’s regulatory standards. Moreover, Inspired assured that these developments would not immediately influence the trading status of its securities on Nasdaq.

Why Was There a Delay in Filing Q3 Results?

The customary period for filing Q3 results had elapsed well before the holiday season, yet Inspired had not disclosed any financial data. In early November, Inspired warned that its financial statements would not be released as scheduled.

Inspired attributed this postponement to several issues, particularly accounting inaccuracies concerning compliance with US GAAP, specifically in the domain of capitalizing software development expenses. These inaccuracies predominantly pertained to the application of relevant accounting norms to projects, prompting a need for the restatement of financial statements dating back to January 1, 2021.

Inspired also cautioned that subsequent financial disclosures, including earnings reports, press releases, and investor presentations containing financial details, should no longer be considered reliable.

Related: Inspired Announces Ian Freeman to Join in the Role of CCO

Inspired Addresses Financial Reporting Problems

Upon evaluating the situation, Inspired acknowledged significant deficiencies in its internal controls over financial reporting. The company is actively instituting measures to correct these shortcomings. The revised financial results, along with additional financial data set for publication in the following month, are anticipated to reflect these corrective actions.

Previously, Inspired sought to mitigate investor concerns regarding these issues, emphasizing that the envisaged adjustments are not expected to alter its cash reserves or overarching business strategy. The latest available financial results from Inspired, released in August, encompass the second quarter and the initial half of 2023.

The report indicated a 12.3% increase in Q2 revenue, totaling $80.1 million, with growth observed across all business segments. Although a rise in expenses resulted in a significant reduction in net profit, the adjusted EBITDA experienced a slight increase. For the first half of the year, revenue surged by 11.0% to $146.4 million, yet higher expenses led to a decline in net profit over the six-month span.

More Finance News

RELATED TOPICS: Finance

Leave a Comment

user avatar
My Name United States of America
Rating:
0.0
Your Comment

User Comments

Comments for Inspired Entertainment Announce Strategic Plan to Ensure Nasdaq Compliance