Nothing unexpected: FORM 8-K - USA TECHNOLOGIES, INC.
Other Events.
Item. 8.01
On September 20, 2019, USA Technologies, Inc. (the "Company") notified the Nasdaq Hearings Panel (the "Panel") that the Company believes that it is unlikely that the Company will meet the Panel’s September 23, 2019 deadline to regain compliance with its periodic filing obligations.
As previously reported, the Company has not been in a position to file the Annual Report on Form 10-K for the fiscal year ended June 30, 2018, the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2018, the Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2018, and the Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2019.
These delays resulted from an internal investigation conducted by the Audit Committee of the Company’s Board of Directors (the “Audit Committee”), the commencement and results of which were disclosed in Current Reports on Form 8-K filed on September 11, 2018 and January 14, 2019, respectively. As disclosed in the Current Report on Form 8-K filed on February 6, 2019, based upon the adjustments to previously reported revenues proposed by the Audit Committee, the Board of Directors determined that the following financial statements shall no longer be relied upon: the audited financial statements for the fiscal year ended June 30, 2017; and the quarterly and year-to-date unaudited financial statements for September 30, 2017, December 31, 2017, and March 31, 2018. The Company indicated that it intended to file restated financial statements for these fiscal periods as soon as practicable. As disclosed in the Current Report on Form 8-K filed on September 4, 2019, the filing of its periodic reports was further delayed by, among other things, the remaining analysis required in connection with the accounting treatment by the Company of the leasing/rental contracts of Cantaloupe Systems, Inc. (“Cantaloupe”), which was acquired by the Company on November 9, 2017. These issues are not related to the internal investigation, were recently discovered during the audit process, and must be resolved by the Company in order for the Company’s independent auditor to complete its audit procedures.
As reported in the Form 12b-25 filed on September 16, 2019, the Company was unable to file, without unreasonable effort or expense, its Annual Report on Form 10-K for the fiscal year ended June 30, 2019 (the “2019 Form 10-K”) within the prescribed time period. As stated therein, the Company believed that it would file the 2019 Form 10-K within the fifteen calendar-day extension period provided by Rule 12b-25(b) promulgated under the Securities Exchange Act of 1934, as amended.
Since the filing of the Form 12b-25, the Company has determined that it is unlikely that the Company will regain compliance with its periodic filing obligations by the September 23, 2019 deadline. In this regard, the Company is completing its analysis of the Cantaloupe leasing/rental contracts as well as additional adjustments to its previously issued and prior fiscal years’ unissued financial statements, including an accrual for the payment of sales taxes in various jurisdictions and the restoration of the Company’s income tax valuation allowance. These additional adjustments are not related to the internal investigation, were discovered during the audit process, and must be resolved by the Company in order for the Company’s independent auditor to complete its audit procedures.
The Company will continue to work diligently towards regaining compliance with its periodic reporting obligations, completion of the 2019 Form 10-K, and completion of any required restatements of its previously issued financial statements, as soon as practicable.
As previously disclosed, the Panel has informed the Company that, if the Company does not regain compliance with its periodic reporting obligations by September 23, 2019, it will issue a delisting determination and the Company’s securities will be suspended from trading on The Nasdaq Stock Market LLC (“Nasdaq”). Following a suspension of trading in the Company’s securities on Nasdaq, the Company expects that its securities would be quoted on the OTC Markets.
