Shares of Canadian cannabis company Sundial Growers (SNDL -2.67%) tanked today after the company released a new Securities and Exchange Commission (SEC) filing yesterday. Sundial shares were down 7.9% at 10:47 a.m. ET on Thursday.
Sundial was originally scheduled to release its fourth-quarter earnings and 2021 annual report on March 29. At that time, it said it expected to report record adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from continuing operations for 2021, but was pushing the release date back by up to two weeks. Now, the company has delayed the annual report's release once again, and investors are concerned.
The latest delay in its financial reporting comes as the company is waiting on an external auditor to complete its work on Sundial's financial statements for the full-year 2021. In its SEC filing, the company added that the process is requiring a "significant amount of additional work and in-depth procedures." It added that the primary reason is that 2021 is the first year Sundial must obtain an audit report on its internal control of financial disclosures that is required under the Sarbanes-Oxley Act of 2002.
Management said this requirement has come because of the company's rapid growth and increased level of corporate activity over the past two years. That activity has included raising capital for acquisitions and investments in an attempt to turn around its performance. The results have improved its balance sheet, but diluted existing shareholders along the way.
Sundial investors have been pessimistic that the company will use its capital successfully, as shares have dropped more than 40% over the last year. Those who are still holding shares will now need to wait another two weeks before getting the next financial and operational update.