Inspired allays fears over Nasdaq compliance warning

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The provider is yet to make public its Form 10-K for the year ended 31 December 2023. This, Nasdaq says, is in breach of Nasdaq Listing Rule 5250(c)(1) and as such has issued a warning to Inspired.

The notification, however, has no immediate effect on the listing of Inspired common stock on Nasdaq. Inspired has 60 calendar days, or until 3 June, to file the form or submit a plan to regain compliance.

Should Inspired submit a plan, Nasdaq can grant an exception of 180 calendar days from the filing’s due date. This would allow Inspired up until 11 September to regain compliance.

However, if Inspired fails to regain compliance in a timely manner, its common stock will be subject to delisting from Nasdaq.

Inspired commits to 15 April publication date

In response, Inspired said that it intends to file the Form 10-K by no later than 15 April. The provider also plans to host a call on this date to discuss the results and its general business trends. 

This filing will be some way past the initial time that Inspired was expected to report its Q4 figures.

Last month, Inspired offered insight into what investors can expect from its Q4 results. The company is set to report revenue and adjusted EBITDA in line with guidance for Q4.

The delayed filing is the result of a broad review of accounting policies, with this taking place during Q4. Inspired said it devoted “considerable” resources to this review.

Issues flagged in the review related to errors in financial statements for periods commencing 1 January 2021. As such, it said these statements can no longer be relied upon and should be restated.

Based on these findings, Inspired said one or more additional “material weaknesses” existed in internal control over financial reporting. This led to it committing to implement changes to remediate such weaknesses including restating financial statements for the periods of concern.

Another warning for Inspired

Incidentally, the latest contact from Nasdaq follows a similar warning over a delay to the provider’s  Q3 results

Nasdaq contacted Inspired in mid-Q4, warning the late filing placed it in breach of its rules. The stock exchange gave Inspired until 22 January to submit a plan to regain compliance, or risk having shares delisted. 

Inspired submitted its plan in January, with this later accepted by Nasdaq. As such, Inspired avoided any further action over the matter.

What happened in Q3?

The delayed Q3 results showed a somewhat mixed performance by Inspired during the three months to 30 September 2023. Revenue climbed 30.9% to $97.5m (£76.9m/€89.9m). 

However, higher spending meant Inspired ended Q3 with a lower net profit of $7.2m, down 58.6%. In addition, adjusted EBITDA slipped 2.2% to $26.7m.

As for the year to date, revenue in the nine months through to 30 September grew 18.0% to $241.8m. 

However, spending was higher in almost all areas in the nine-month period. This meant net loss for the period reached $1.0m, compared to a $20.4m profit in the previous year. Adjusted EBITDA also crept up 1.1% to $74.0m.

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