Inspired compliance plan approved by Nasdaq
Submitted last month, the plan states Inspired will file a 10-Q form for Q3 2023 with Nasdaq by 28 February.
Inspired is also working to complete a 10-K/A for the year ended 31 December 2022, with restated financial statements. In addition, it aims to complete Forms 10-Q/A for Q1 and Q2 of 2023 by the same date.
Nasdaq has accepted this plan, paving the way for Inspired to regain compliance and move past the episode.
How did Inspired lose Nasdaq compliance?
Nasdaq contacted Inspired in November over the late filing of its Q3 2023 results. Inspired previously said it needed more time to complete the results, with work ongoing to restate certain previously issued statements.
Nasdaq contacted Inspired over the issue saying the late filing places it in breach of its rules. The stock exchange gave Inspired until 22 January to submit a plan to regain compliance, or risk having its shares de-listed.
Inspired missed the deadline by one day, formally filing its proposed plan on 23 January.
Going into detail as to why the filing was late, Inspired noted several concerns. These include accounting errors relating to compliance with US GAAP, connected to accounting policies for capitalising software development costs.
Inspired says errors were flagged in financial statements for financial periods commencing 1 January 2021. As such, the statements can no longer be relied upon and should be restated.
The provider also said any other statements after that date featuring financial information can no longer be relied upon.
Inspired seeks to ease investor concerns
Having identified “material weaknesses” in internal control over financial reporting, Inspired is now working to address these issues. In line with the plan, Q3 figures should be made available before the end of the month.
Meanwhile, Inspired sought to allay investor fears over the issues. It said it does not believe the planned changes will impact its cash position or business plan.
Inspired has not released any financial results since August 2023, when its Q2 and H1 figures were published. These revealed a 12.3% rise in Q2 revenue to $80.1m (£63.8m/€74.5m) amid growth across all business areas.
Higher spending pushed net profit down 85.4% to $2.3m, but adjusted EBITDA was up to $26.2m.
In terms of H1, revenue was 11.0% higher at $146.4m but net profit fell 53.6% to $3.9m in the six-month period.