Shares of USA Technologies (OTC:USAT) are taking a beating today, down by 34% as of 11:30 a.m. EDT, after the company said it would delay filing its annual Form 10-K with the Securities and Exchange Commission. USA Technologies said it has opened an internal investigation into accounting practices and financial reporting.
The deadline to file its 10-K for the fiscal year ended June 30 is on Sept. 13, and USA Technologies will not meet that deadline. As a result, the company is filing a Form 12b-25 with regulators as a notification of late filing, which will give it a 15-day extension.
News of the internal investigation is rattling investors, as USA Technologies says that it is looking at certain contractual arrangements in current and prior periods. The company will scrutinize the accounting treatment, financial reporting, and internal controls related to those contractual arrangements. The audit committee of the board is working with independent legal and forensic accounting advisors to conduct the investigation.
Accounting investigations are about as scary as it gets for investors, as they open up a slew of financial and legal risks. Numerous class action law suits have already been announced in the wake of the news, which comes just a few months after USA Technologies raised $50 million in a secondary offering.
For now, investors can only wait and hope that the company concludes its investigation promptly, although it could potentially result in some restatements of financial figures in prior periods.