Inspired receives Nasdaq approval for plan to regain compliance

Inspired Entertainment has received approval from Nasdaq for its proposed plan to regain compliance with the US stock exchange’s rules, the B2B gaming content and technology provider announced on Monday.

In a statement, the business noted it received a notification stating that Nasdaq has accepted the company’s plan of compliance to file a Form 10-Q for Q3 2023 by no later than February 28, 2024.

In addition to working to file that form, the company is concurrently moving to complete the 10-K/A for the year ended December 31, 2022, with restated financial statements, as well as Forms 10-Q/A for Q1 and Q2 2023, and aims to file such reports "as soon as practicable, on or before February 28, 2024."  

Nasdaq's acceptance of this plan paves the way for the supplier to regain compliance with the US stock exchange’s rules. Nasdaq had first contacted Inspired in November over the late filing of its Q3 2023 results, noting this failure placed the business in breach of its rules. 

For its part, Inspired previously said it needed extra time to complete the results, as it worked to restate certain previously issued statements. The stock exchange then gave the company until January 22 to submit a plan to regain compliance, a deadline the provider missed by one day, filing its proposed plan on January 23.

The company cited several concerns as to why the filing was late, including accounting errors relating to compliance with US GAAP connected to accounting policies for capitalizing software development costs.

Errors were flagged in financial statements for financial periods commencing on January 1, 2023, and as such, these statements should be restated and can no longer be relied upon, as per the supplier.

As the company works to address the "material weaknesses" identified in internal control over financial reporting, Inspired expects to make Q3 figures available before the end of the month. The provider says it does not expect the planned changes to impact its cash position or business plan.

Inspired's last financial results, unveiled in August 2023 and covering Q2 and H1, revealed a 12.3% rise in second-quarter revenue to $80.1 million amid growth across all business areas. Meanwhile, H1 revenue was 11% higher at $146.4 million, but net profit dropped 53.6% to $3.9 million in the first half of the year.