What happened

Shares of USA Technologies (NASDAQ:USAT) fell more than 10% in midday trading Monday, after the networking and cashless-transaction company admitted it would miss yet another deadline to file financial statements with the Securities and Exchange Commission. Just weeks ago USA Technologies seemed confident it would be able to meet the Monday deadline, and investors are quickly losing patience with the company.

So what

USA Technologies shares have lost more than 70% of their value since Sept. 1, 2018, pressured by accounting issues. The company's auditor, RSM, resigned in February, and USA Tech's board at that time warned that some financial statements and related press releases were not reliable.

A stock chart displayed on a screen, with a finger following it downward

Image source: Getty Images.

The issues surfaced during an internal probe that USA Technologies initiated late last year. USA Technologies is behind in filing its annual report for the fiscal year ending June 30, 2018, and recent quarterly reports.

But the company seemed to be working through its issues. USA Technologies is not in compliance with Nasdaq listing rules, which require companies to file all periodic financial reports in a timely manner, but on Sept. 4 USA Technologies said it would be able to file the needed information to get into compliance by Sept. 23.

Apparently that projection was too optimistic. After markets closed on Sept. 20, the company said in an SEC filing that it was "unlikely" to meet that Sept. 23 deadline. In the filing, USA Technologies notes that it "expects" its shares will be suspended from the Nasdaq, meaning the stock would have to trade on the over-the-counter (OTC) market, or "pink sheets."

Now what

No company wants a demotion to the pink sheets, but USA Technologies notes that it "will continue to work diligently toward regaining compliance with its periodic reporting obligations ... as soon as practicable." The company has some heavy hitters in its camp. Hedge fund Hudson Executive Capital, which is run by former JPMorgan Chase CFO Douglas Braunstein, disclosed a 12% stake in May.

If USA Technologies can get its house in order, this could end up being a buying opportunity. But buying into pink-sheet companies is more speculation than investing, and it's easy to get burned. Investors are better off looking elsewhere for tech stocks to buy.