urban-gro, Inc. Announces Delayed 10-Q Filing and Restatement of Previously Issued Financial Statements Tied to Incorrect Accounting of Deferred Tax Liabilities Associated with Historical Acquisitions
urban-gro, Inc. (NASDAQ:UGRO) announced a delay in filing its Q2 2024 10-Q and the need to restate financial statements for 2022, 2023, and Q1 2024 due to incorrect accounting of deferred tax liabilities from historical acquisitions. The company expects no material impact on revenue, Adjusted EBITDA, or cash flows. Key points:
1. New auditor Sadler Gibb identified the issue during a re-audit of 2023 financials.
2. Q2 2024 revenue expected to reach $17.5 million, a 13% sequential increase.
3. Restatement likely to reduce cumulative net losses for 2022 and 2023.
4. Company aims to file restated financials and Q2 2024 10-Q as soon as practicable.
5. Previously issued financial reports and communications for affected periods should no longer be relied upon.
urban-gro, Inc. (NASDAQ:UGRO) ha annunciato un ritardo nella presentazione del suo 10-Q per il secondo trimestre del 2024 e la necessità di rettificare i bilanci finanziari per il 2022, il 2023 e il primo trimestre del 2024 a causa di un'errata contabilizzazione delle passività fiscali deferite derivanti da acquisizioni storiche. L'azienda non prevede impatti significativi su ricavi, EBITDA rettificato o flussi di cassa. Punti chiave:
1. Il nuovo revisore, Sadler Gibb, ha identificato il problema durante una ri-verifica dei bilanci 2023.
2. Si prevede che i ricavi del secondo trimestre del 2024 raggiungano 17,5 milioni di dollari, con un incremento sequenziale del 13%.
3. La rettifica dovrebbe ridurre le perdite nette cumulative per il 2022 e il 2023.
4. L'azienda intende presentare i bilanci rettificati e il 10-Q per il secondo trimestre del 2024 il prima possibile.
5. I rapporti finanziari e le comunicazioni precedentemente emessi per i periodi interessati non devono più essere considerati attendibili.
urban-gro, Inc. (NASDAQ:UGRO) anunció un retraso en la presentación de su 10-Q para el segundo trimestre de 2024 y la necesidad de restablecer los estados financieros para 2022, 2023 y el primer trimestre de 2024 debido a una contabilidad incorrecta de las obligaciones tributarias diferidas por adquisiciones históricas. La empresa no espera un impacto material en los ingresos, EBITDA ajustado o flujos de efectivo. Puntos clave:
1. El nuevo auditor, Sadler Gibb, identificó el problema durante una re-auditoría de los estados financieros de 2023.
2. Se espera que los ingresos del segundo trimestre de 2024 alcancen 17,5 millones de dólares, un aumento secuencial del 13%.
3. La reexpresión probablemente reducirá las pérdidas netas acumuladas para 2022 y 2023.
4. La empresa tiene como objetivo presentar los estados financieros restablecidos y el 10-Q del segundo trimestre de 2024 tan pronto como sea posible.
5. Los informes financieros y comunicaciones emitidos anteriormente para los períodos afectados ya no deben ser tomados en cuenta.
urban-gro, Inc. (NASDAQ:UGRO)은 2024년 2분기 10-Q 제출 지연과 2022년, 2023년 및 2024년 1분기 재무제표를 재작성할 필요성을 발표했습니다. 이는 역사적 인수에서 발생한 이연 법인세 부채의 잘못된 회계 처리 때문입니다. 회사는 수익, 조정된 EBITDA 또는 현금 흐름에 중대한 영향을 미치지 않을 것으로 예상하고 있습니다. 주요 사항:
1. 새로운 감사인 Sadler Gibb가 2023년 재무 재감사 중 문제를 확인했습니다.
2. 2024년 2분기 수익은 1,750만 달러에 이를 것으로 예상되며, 이는 13%의 순증가입니다.
3. 재작성으로 2022년과 2023년의 누적 순손실이 줄어들 가능성이 있습니다.
4. 회사는 가능한 한 빨리 재작성된 재무제표와 2024년 2분기 10-Q를 제출할 계획입니다.
5. 영향을 받은 기간 동안 이전에 발행된 재무 보고서 및 통신은 더 이상 신뢰할 수 없습니다.
urban-gro, Inc. (NASDAQ:UGRO) a annoncé un retard dans le dépôt de son 10-Q pour le deuxième trimestre de 2024 et la nécessité de revoir les états financiers pour 2022, 2023 et le premier trimestre de 2024 en raison d'une comptabilité incorrecte des passifs fiscaux différés issus d'acquisitions historiques. L'entreprise ne s'attend à aucun impact majeur sur les revenus, l'EBITDA ajusté ou les flux de trésorerie. Points clés :
1. Le nouvel auditeur, Sadler Gibb, a identifié le problème lors d'un nouvel audit des états financiers de 2023.
2. Les revenus du deuxième trimestre 2024 devraient atteindre 17,5 millions de dollars, soit une augmentation séquentielle de 13%.
3. La révision devrait réduire les pertes nettes cumulatives pour 2022 et 2023.
4. L'entreprise vise à déposer les états financiers révisés et le 10-Q pour le deuxième trimestre 2024 dès que possible.
5. Les rapports financiers et les communications précédemment émis pour les périodes concernées ne doivent plus être considérés comme fiables.
urban-gro, Inc. (NASDAQ:UGRO) hat eine Verzögerung bei der Einreichung ihres 10-Q für das 2. Quartal 2024 sowie die Notwendigkeit angegeben, die Finanzberichte für 2022, 2023 und das 1. Quartal 2024 aufgrund fehlerhafter Buchhaltung von latenten Steuerverbindlichkeiten aus historischen Übernahmen neu zu erstellen. Das Unternehmen erwartet keine wesentlichen Auswirkungen auf den Umsatz, das bereinigte EBITDA oder die Zahlungsströme. Wichtige Punkte:
1. Der neue Wirtschaftsprüfer Sadler Gibb hat das Problem während einer Nachprüfung der Finanzunterlagen von 2023 festgestellt.
2. Der Umsatz im 2. Quartal 2024 wird voraussichtlich 17,5 Millionen Dollar erreichen, was einen sequenziellen Anstieg von 13 % bedeutet.
3. Die Neufeststellung wird voraussichtlich die kumulierten Nettoverluste für 2022 und 2023 reduzieren.
4. Das Unternehmen plant, die berichteten Finanzunterlagen und den 10-Q für das 2. Quartal 2024 so schnell wie möglich einzureichen.
5. Zuvor veröffentlichte Finanzberichte und Mitteilungen für die betroffenen Zeiträume sollten nicht länger als verlässlich angesehen werden.
- Expected Q2 2024 revenue of $17.5 million, representing a 13% sequential increase
- No material impact expected on previously reported revenues, Adjusted EBITDA, or cash flows
- Restatement likely to result in a reduction of cumulative net losses for fiscal years 2022 and 2023
- Accelerated performance in Q3 2024 to date, indicating stronger results expected in the second half of the year
- Delay in filing Q2 2024 10-Q report
- Need to restate financial statements for 2022, 2023, and Q1 2024
- Previously issued financial reports and communications for affected periods no longer reliable
- Uncertainty regarding the timeline for filing restated financials and Q2 2024 10-Q
Insights
The delayed 10-Q filing and restatement of financial statements for urban-gro (NASDAQ:UGRO) is a significant development that warrants careful scrutiny. While the company claims no material impact on revenue, Adjusted EBITDA, or cash flows, the incorrect accounting of deferred tax liabilities is concerning. The expected reduction in cumulative net losses for 2022 and 2023 could potentially improve the company's financial position on paper. However, the need for a re-audit of 2022 financials and amendments to multiple filings raises questions about the company's internal controls and financial reporting processes.
On a positive note, the projected Q2 2024 revenue of
The restatement of financial statements and delayed 10-Q filing for urban-gro raises significant legal and regulatory concerns. The company's inability to meet SEC filing deadlines could potentially lead to compliance issues with NASDAQ listing requirements. The dismissal of the previous auditor, BF Borgers, following SEC proceedings against them, adds another layer of complexity to the situation.
The incorrect accounting of deferred tax liabilities, while described as a 'technical accounting situation,' could potentially trigger shareholder litigation if investors believe they were misled by previously reported financial results. The company's statement that previously issued financial reports should no longer be relied upon is a red flag from a legal perspective. urban-gro must navigate this restatement process carefully to avoid potential securities law violations and maintain transparency with shareholders to mitigate legal risks.
The incorrect accounting of deferred tax liabilities associated with urban-gro's historical share-purchase acquisitions is a complex issue with significant implications. The company's previous practice of amortizing these liabilities over time, instead of recording them as immediate income tax benefits, has led to a misrepresentation of their tax position. This error likely resulted in overstated net losses in past financial statements.
The expected reduction in cumulative net losses for 2022 and 2023, once corrected, could potentially improve the company's financial appearance. However, it's important to note that this is primarily an accounting adjustment and doesn't reflect actual cash flow changes. Investors should be aware that while this correction may positively impact reported earnings, it doesn't necessarily indicate improved operational performance. The need for a comprehensive re-audit suggests potential weaknesses in the company's tax accounting practices and internal controls, which may require significant improvements going forward.
No Expected Material Impact on Revenue, Adjusted EBITDA, or Cash Flows
Expects Q2 2024 Revenue of
LAFAYETTE, CO / ACCESSWIRE / August 14, 2024 / urban-gro, Inc. (NASDAQ:UGRO) ("urban-gro" or the "Company"), an integrated professional services and Design-Build firm offering solutions to the Controlled Environment Agriculture ("CEA") and other commercial sectors, today announced its decision to restate its previously issued financial statements for the years ended December 31, 2022 and 2023, as well as the first quarter of 2024. As a result of the restatement process, the Company will not be able to file its Quarterly Report on Form 10-Q for the second fiscal quarter of 2024 within the filing deadline established by the Securities and Exchange Commission (the "SEC").
As reported on the Company's Current Report on Form 8-K filed on May 6, 2024, the Company dismissed its previous independent registered public accounting firm, BF Borgers CPA PC ("BF Borgers"). On May 3, 2024, the SEC instituted public administrative and cease-and-desist proceedings against BF Borgers. In the Current Report on Form 8-K filed on May 29, 2024, the Company announced that it had appointed Sadler, Gibb & Associates, LLC ("Sadler Gibb") as its new independent public accounting firm. Sadler Gibb has substantially conducted a re-audit of the Company's previously issued financial statements for the year ended December 31, 2023. In connection with the re-audit of the 2023 financial statements as conducted to date, Sadler Gibb has not identified any material misstatements in the Company's revenue, Adjusted EBITDA, or cash flows.
Sadler Gibb identified incorrect accounting of the deferred tax liabilities associated with historical share-purchase acquisitions made by the Company. Accounting for the initial deferred tax liabilities associated with the acquisitions was determined to be proper, however, the majority of the deferred tax liabilities that were recorded in connection with the share-purchase acquisition of each acquired company should have been recorded as income tax benefits to the statement of operations shortly after each acquisition. The Company had been amortizing these deferred tax liabilities to the statement of operations over a period corresponding to the amortization of the intangible assets with which they were associated. Adjusting for this incorrect accounting is expected to result in a reduction in cumulative net losses for fiscal years 2022 and 2023.
As a result of the audit findings to date, the Company will now engage Sadler Gibb to re-audit the Company's fiscal year 2022 financial statements in order for the Company to file amended 10-K and 10-Q filings for the fiscal years ended December 31, 2023 and 2022 and the fiscal quarters ended March 31, 2022 through March 31, 2024. As part of the 2023 re-audit, Sadler Gibb has identified other immaterial adjustments which will also be adjusted in connection with the amended filings. Based on the information currently available, which is limited to Sadler Gibb's re-audit of the 2023 financial statements, the Company does not expect a material impact to previously reported revenues, Adjusted EBITDA, or cash flows.
As a result, the Company has not yet filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and will be unable to file the report by the prescribed due date. Although the Company cannot at this time estimate when it will file its restated financial statements and the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, it is diligently pursuing completion of the restatements and intends to make such filings as soon as reasonably practicable following the completion of Sadler Gibb's re-audit of the 2022 financial statements.
Based on the preliminary findings by and in consultation with Sadler Gibb, the Company's Audit Committee has determined that the Company's previously issued financial statements for the years ended December 31, 2023 and 2022 and the quarterly periods ended during those fiscal years, as well as the quarter ended March 31, 2024, should no longer be relied upon. Similarly, any previously issued or filed reports, press releases, earnings releases, investor presentations or other communications of the Company describing the Company's financial results or other financial information relating to those periods should no longer be relied upon.
urban-gro's Chairman and CEO, Brad Nattrass, commented "while it is disappointing that we need to restate our financials due to this technical accounting situation, we do not expect that it will materially affect our revenues, Adjusted EBITDA, or cash flows. Revenues in the second quarter are expected to exceed
Additional information relating to the restatement is available in the Company's Current Report on Form 8-K filed today.
About urban-gro, Inc.
urban-gro, Inc.® (NASDAQ:UGRO) is an integrated professional services and Design-Build firm. We offer value-added architectural, engineering, and construction management solutions to the Controlled Environment Agriculture ("CEA"), industrial, healthcare, and other commercial sectors. Innovation, collaboration, and creativity drive our team to provide exceptional customer experiences. With offices across North America and in Europe, we deliver Your Vision - Built. Learn more by visiting www.urban-gro.com
Safe Harbor Statement
This press release contains 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. When used in this release, terms such as "believes," "will," "expects," "anticipates," "may," "projects" and similar expressions and variations as they relate to the Company or its management are intended to identify forward-looking statements. The forward-looking statements in this press release include, without limitation, the expected impacts of the material misstatements identified in this press release on the Company's net loss, whether any additional misstatements will be identified as part of the re-audit of the Company's 2022, 2023 and first quarter 2024 financial statements, and the expected timing of filing restated periodic reports and the Form 10-Q for the Company's second fiscal quarter of 2024.. These and other forward-looking statements are based on the current expectations, forecasts, beliefs and assumptions of the Company's management and are subject to risks and uncertainties that could cause actual outcomes and results to differ materially from those anticipated or expected, including, among others, our ability to successfully manage and integrate acquisitions, our ability to accurately forecast revenues and costs, competition for projects in our markets, our ability to predict and respond to new laws and governmental regulatory actions, including any potential rescheduling of cannabis and passage of the SAFER Banking Act, our ability to successfully develop new and/or enhancements to our product offerings and develop a product mix to meet demand, risks related to weather conditions that are adverse to our business operations, supply chain issues for the Company or third party suppliers, rising interest rates, economic downturn or other factors that could cause delays or the cancellation of projects in our backlog or our ability to secure future projects, our ability to maintain favorable relationships with suppliers, risks associated with reliance on key customers and suppliers, our ability to attract and retain key personnel, results of litigation and other claims and insurance coverage issues, risks related to our information technology systems and infrastructure, our ability to maintain effective internal controls, our ability to execute on our strategic plans, our ability to achieve and maintain cost savings, the sufficiency of our liquidity and capital resources, and our ability to achieve our key initiatives for 2024, particularly our growth initiatives. A more detailed description of these and certain other factors that could affect actual results is included in the Company's filings with the Securities and Exchange Commission. Copies of these filings are available online at www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date hereof, except as may be required by law.
Investor Contacts:
Jeff Sonnek - ICR, Inc.
(720) 730-8160
investors@urban-gro.com
Media Contact:
Barbara Graham - urban-gro, Inc.
(720) 903-1139
media@urban-gro.com
SOURCE: urban-gro, Inc.
View the original press release on accesswire.com
FAQ
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