Saturday , February 22, 2020

USA Technologies Seeks Another Deadline Extension for Filing Late Reports; Shares Plunge

Already nearly a year late in filing the first of several overdue financial reports and with its stock facing delisting, vending machine payments provider USA Technologies Inc. on Wednesday reported it has asked The Nasdaq Stock Market LLC for yet another extension to file required documents.

The delay request is at least the fifth Malvern, Pa.-based USAT has asked for from the Nasdaq since it first disclosed accounting problems in September 2018. In a twist, USAT said its new request is not related to those problems and subsequent internal investigation that originally caused it to delay filing several federal reports required of publicly traded companies. Instead, the company said it has discovered accounting problems related to its $85 million acquisition of Cantaloupe Systems Inc. in November 2017. A big software provider to the vending machine industry, Cantaloupe added 270,000 new connections to USAT’s expanding unattended-payment locations network.

Now USAT wants its current Sept. 9 deadline extended to Sept. 23, which it says is the latest date available under the exception period spelled out by Nasdaq rules. In the wake of Wednesday’s news, USAT’s share price dropped 18% as of late morning from Tuesday’s $8.15 close.

In an Aug. 30 report to the Securities and Exchange Commission, USAT said it informed a Nasdaq panel that “it was unlikely that the company will regain compliance with its periodic filing requirements by September 9, 2019.” That determination “was due primarily to the remaining analysis required in connection with the historical accounting treatment of [Cantaloupe] leasing/rental contracts,” the filing says. The company has determined the amount of finance receivables USAT recorded with the acquisition, $5.1 million, is incorrect, according to the filing.

“These issues are not related to the internal investigation, were recently discovered during the audit process, have caused delays in the audit, and must be resolved by the company in order for the company’s independent auditor to complete its audit procedures,” the filing says. “Certain trade and finance receivables relating to historical customer leasing/rental contracts of Cantaloupe appear to have been double counted on the opening balance sheet, and the company’s sales-type lease accounting policy was not consistently or accurately applied to these contracts subsequent to the date of the acquisition.”

USAT believes it can complete the required work by Sept. 23, though the company noted that it can give no assurance the Nasdaq will grant its request. A USAT spokesperson declined to comment beyond a news release.

USAT was supposed to have filed its annual report for fiscal 2018 ended June 30 to the SEC by last September. It still hasn’t filed that one, as well as reports for the following three quarters. If the company doesn’t file by the deadline, its shares could be delisted from the Nasdaq Global Market.

Following disclosure of the accounting problems, the company’s chief financial officer and outside auditor resigned, and the company declared that some of its earlier financial reports were unreliable.

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