InfuSystem Receives Notice from NYSE American Regarding Late Filing of Annual Report on Form 10-K
- None.
- Potential risk of suspension and delisting if Company fails to file Delinquent Report within Initial Cure Period or Additional Cure Period.
Insights
The notification of non-compliance received by InfuSystem Holdings, Inc. from the NYSE American LLC regarding the late filing of their annual report is a significant concern for investors and stakeholders. This delay, attributed to the evaluation of potential accounting errors, raises questions about the robustness of the company's financial controls and reporting systems. It is essential to consider the impact of such a delay on investor confidence and the potential implications for the company's stock price.
Investors typically react negatively to uncertainties and potential restatements of financial results, which could lead to increased volatility in the company's stock. Furthermore, the extended timeline provided for compliance indicates a complex situation that may take considerable time to rectify. It is important for stakeholders to monitor the company's progress in addressing these issues and the effectiveness of any implemented corrective measures.
The legal implications of InfuSystem's failure to file its annual report on time are multifaceted. The NYSE American LLC's continued listing standards serve to maintain market integrity and protect investors. Non-compliance with these standards can lead to sanctions, including delisting, which would severely restrict the company's ability to raise capital in public markets. The company's acknowledgment of the need for additional time to evaluate potential errors related to expense classification and lease accounting standards (ASC 842) suggests significant internal control issues that may have legal consequences.
While the Exchange has provided an Initial Cure Period and potentially an Additional Cure Period, these grace periods are not guaranteed and can be cut short if the Exchange deems it necessary. This uncertainty adds a layer of risk for shareholders and potential investors, as the company's future on the Exchange hangs in the balance.
The disclosure of potential errors in expense classification and the adoption of ASC 842, which pertains to lease accounting, highlights critical areas of concern within InfuSystem's accounting practices. Expense misclassification can affect gross margins and operating income, key metrics for evaluating a company's performance. Moreover, proper implementation of ASC 842 is important for transparency in reporting lease obligations, which can have a significant impact on a company's balance sheet and debt ratios.
For stakeholders, the company's ability to address and correct these accounting issues is of paramount importance. The outcome of these corrections will not only affect the company's reported financial position but also investor perception of management's competency in financial reporting. The resolution of these accounting challenges will be a determinant in restoring market confidence and ensuring the accuracy of financial statements going forward.
The Company has been unable to file the Delinquent Report because, as previously disclosed in the Notification of Late Filing on Form 12b-25 filed by the Company with the SEC on March 14, 2024, the Company requires additional time to complete its procedures to evaluate potential errors related to (i) the classification of certain expenses included in general and administrative costs that should have been included in cost of sales, and (ii) the adoption and ongoing application of Accounting Standards Update No. 2016-02, Leases (Topic 842), referred to as ASC 842.
In accordance with Section 1007 of the Company Guide, the Company will have six months from the date of the Filing Delinquency (the "Initial Cure Period"), to file the Delinquent Report with the SEC. The Exchange will monitor the Company and the status of the Delinquent Report and any subsequent delayed filings, including through contact with the Company, until the Filing Delinquency is cured. If the Company fails to file the Delinquent Report during the Initial Cure Period, the Exchange may, in its sole discretion, grant an up to six-month additional cure period (the "Additional Cure Period"). The Company can regain compliance with the Exchange’s continued listing standards at any time during the Initial Cure Period or Additional Cure Period, as applicable, by filing the Delinquent Report and any subsequent delayed filings with the SEC. If the Exchange determines that an Additional Cure Period is not appropriate, suspension and delisting procedures will commence in accordance with the procedures set out in Section 1010 of the Company Guide. If the Exchange determines that an Additional Cure Period is appropriate and the Company fails to file the Delinquent Report and any subsequent delayed filings by the end of that period, suspension and delisting procedures will generally commence.
Notwithstanding the foregoing, however, the Exchange may, in its sole discretion, decide (i) not to afford the Company any Initial Cure Period or Additional Cure Period, as the case may be, at all or (ii) at any time during the Initial Cure Period or Additional Cure Period, to truncate the Initial Cure Period or Additional Cure Period, as the case may be, and immediately commence suspension and delisting procedures if the Company is subject to delisting pursuant to any other provision of the Company Guide, including if the Exchange believes, in the its sole discretion, that continued listing and trading of the Company’s securities on the Exchange is inadvisable or unwarranted in accordance with Sections 1001 through 1006 thereof.
The Company intends to regain compliance with the Exchange's continued listing standards. There can be no assurance that the Company will ultimately regain compliance with all applicable Exchange listing standards.
About InfuSystem Holdings, Inc.
InfuSystem Holdings, Inc. (NYSE American: INFU), is a leading national health care service provider, facilitating outpatient care for durable medical equipment manufacturers and health care providers. INFU services are provided under a two-platform model. The first platform is Patient Services, providing the last-mile solution for clinic-to-home healthcare where the continuing treatment involves complex durable medical equipment and services. The Patient Services segment is comprised of Oncology, Pain Management and Wound Therapy businesses. The second platform, Device Solutions, supports the Patient Services platform and leverages strong service orientation to win incremental business from its direct payer clients. The Device Solutions segment is comprised of direct payer rentals, pump and consumable sales, and biomedical services and repair. Headquartered in
Forward-Looking Statements
Certain statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, such as statements relating to future actions, our share repurchase program and capital allocation strategy, business plans, strategic partnerships, growth initiatives, objectives and prospects, future operating or financial performance, guidance and expected new business relationships and the terms thereof (including estimated potential revenue under new or existing contracts). The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “goal,” “expect,” “strategy,” “future,” “likely,” variations of such words, and other similar expressions, as they relate to the Company, are intended to identify forward-looking statements. Forward-looking statements are subject to factors, risks and uncertainties that could cause actual results to differ materially, including, but not limited to, our ability to successfully execute on our growth initiatives and strategic partnerships, our ability to enter into definitive agreements for the new business relationships on expected terms or at all, our ability to generate estimated potential revenue amounts under new or existing contracts, the uncertain impact of the COVID-19 pandemic, our dependence on estimates of collectible revenue, potential litigation, changes in third-party reimbursement processes, changes in law, global financial conditions and recessionary risks, rising inflation and interest rates, supply chain disruptions, systemic pressures in the banking sector, including disruptions to credit markets, the Company's ability to remediate its previously disclosed material weaknesses in internal control over financial reporting, contributions from acquired businesses or new business lines, products or services and other risk factors disclosed in the Company’s most recent annual report on Form 10-K and, to the extent applicable, quarterly reports on Form 10-Q. Our strategic partnerships are subject to similar factors, risks and uncertainties. All forward-looking statements made in this press release speak only as of the date hereof. We do not undertake any obligation to update any forward-looking statements to reflect future events or circumstances, except as required by law.
Additional information about InfuSystem Holdings, Inc. is available at www.infusystem.com.
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Joe Dorame, Joe Diaz & Robert Blum
Lytham Partners, LLC
602-889-9700
Source: InfuSystem Holdings, Inc.
FAQ
Why did InfuSystem Holdings, Inc. receive a notice of non-compliance from NYSE American?
What issues did InfuSystem Holdings, Inc. cite for the delayed filing of the Annual Report?
What is the Initial Cure Period granted to InfuSystem Holdings, Inc. by NYSE American?
What happens if InfuSystem Holdings, Inc. fails to file the Delinquent Report within the Initial Cure Period?
Is there a guarantee that InfuSystem Holdings, Inc. will regain compliance with the Exchange's continued listing standards?
