I think the troubles are more daunting than anticipated. If an auditing firm thought this would be easy to tend to, someone would have "wanted" the payday to take care of things.
No one apparently wants the payday.
This isn't good.
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On February 26, 2019, USA Technologies, Inc. (the “Company”), received a notice from the Staff (the “Staff”) of the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”). The notice indicated that trading of the Company’s securities will be suspended from The Nasdaq Global Market and the Company’s securities will be delisted from The Nasdaq Stock Market unless the Company requested an appeal of this determination with the Nasdaq Hearings Panel (the “Panel”) by no later than March 5, 2019. The notice stated that the Staff had determined that the Company would not be in a position to file all required periodic financial reports with the Securities and Exchange Commission (the “SEC”) as required by Nasdaq Listing Rule 5250(c)(1) (the “Rule”) by the March 12, 2019 deadline previously granted by the Staff. As previously announced, at the time of granting the extended deadline, the Staff had advised the Company that a failure to file the periodic financial reports by the extended deadline would result in a notice of delisting of the Company’s securities.
The Company intends to timely request a hearing before the Panel, which request will automatically stay the suspension of trading in the Company’s stock for 15 calendar days. In connection with its request for a hearing, the Company also intends to request that the Panel further stay any suspension of trading, pending the hearing. In accordance with applicable rules, the Panel will review the request for an extended stay and notify the Company of its conclusion as soon as is practicable but by no later than 15 calendar days following the deadline to request the hearing, or by March 20, 2019. The notice states that hearings are typically scheduled to occur approximately 30 to 45 calendar days after the date of the hearing request.
According to applicable rules, at the hearing, the Panel has the discretion to grant the Company an extension through September 9, 2019 in order to regain compliance with the Rule. There can be no assurance that the Panel will extend the stay of the trading suspension beyond the automatic 15 calendar-day period or ultimately grant the Company’s request for continued listing on Nasdaq.
As indicated above, the Staff had previously granted the Company until March 12, 2019, in order to file with the SEC its Annual Report on Form 10-K for the fiscal year ended June 30, 2018, and the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2018, as well as any other periodic financial report that would be required to be filed with the SEC prior to such date (collectively, the “Unfiled Reports”).
As reported in its Form 8-K dated February 6, 2019, the Company’s auditor resigned as of February 1, 2019, and recalled its previously issued audit report on the Company’s internal control over financial reporting and consolidated financial statements for the fiscal year ended June 30, 2017. The Form 8-K also reported that the Company had determined that its audited financial statements for the fiscal year ended June 30, 2017, and quarterly and year-to-date unaudited consolidated financial statements for September 30, 2017, December 31, 2017, and March 31, 2018 should no longer be relied upon. On February 8, 2019, the Company orally informed the Staff that the Company would not be in a position to file the Unfiled Reports by the March 12, 2019 deadline.
The Nasdaq notice indicated that the Staff’s determination was based upon the Company’s oral communication with the Staff on February 8, 2019, the resignation of the Company’s auditor, the determination of the Company to restate certain of its financial statements, and the inability of the Company to timely file with the SEC its Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2019 as reported in the Company’s Form 12b-25 filed with the SEC on February 11, 2019.
The Company is currently seeking a new independent registered public accounting firm and intends to engage such a firm as soon as practicable. The Company anticipates that it will file the restated financial statements for the affected fiscal periods as soon as practicable. The Company is also working diligently to complete and file the Unfiled Reports as soon as practicable.
On March 4, 2019, the Company issued a press release announcing its receipt of the Nasdaq notice. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference.
