Inspired Entertainment Faces Nasdaq Delisting оver Late Q3 Filing
LISTEN TO THIS ARTICLE:The Nasdaq stock exchange has warned Inspired Entertainment due to company’s Q3 results being filed late.
This delay is a breach of Nasdaq's Listing Rule 5250(c)(1), which demands timely filing of the Form 10-Q document, detailing a company's quarterly financial performance. Inspired Entertainment had previously requested additional time to complete these financial statements, which cover up to September 30, 2023. Additionally, the company is working on rectifying certain previously issued financial statements.
Inspired's Compliance Deadline
In response to this issue, Nasdaq has given Inspired Entertainment a strict deadline. The company must either submit the necessary Form 10-Q or present a plan to regain compliance with Nasdaq's Listing Rules by January 22, 2024. If Nasdaq approves the compliance plan, Inspired may receive an extension of up to 180 days, until May 7, 2024, to file the Form 10-Q. However, failure to meet these requirements could lead to the delisting of Inspired's common stock from the Nasdaq.
Inspired's delay in filing stems from several accounting errors, particularly in adhering to U.S. GAAP standards for capitalizing software development costs. These errors mainly concern the application of accounting standards to specific projects. Inspired discovered these discrepancies in financial statements starting from January 1, 2021, and acknowledged that these statements, along with various related reports and releases, should no longer be considered reliable. As a result, Inspired is reviewing other financial statement items and accounting policies to ensure full compliance.
Financial Restatements and Investor Reassurance
Inspired has identified "material weaknesses" in its internal financial reporting controls and is planning to implement changes to address these issues. The company aims to restate its consolidated financial statements for the affected periods, as detailed in its report to the US Securities and Exchange Commission on November 8. Despite these challenges, Inspired remains confident that these changes will not affect its cash position or business plans, though it has not set a definite timeline for filing the amended reports.
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