USA Technologies gets dumped by auditor, loses half its value today #USAT

Tom Paine


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USA Technologies (NASDAQ: USAT) lost half its value today when its external audit firm, RSM US LLP, informed its board's audit committee that it was resigning from the account:

"RSM indicated in its letter to the audit committee that, based on the totality of the information, it had concluded in its professional judgment that it can no longer rely on management representations in connection with the audit of the Company’s 2017 internal control over financial reporting and consolidated financial statements," USAT said in an SEC filing .

"The Company anticipates that it will file the restated financial statements for the affected fiscal periods as soon as practicable. The Company is also working diligently to complete and file the Annual Report on Form 10-K for the fiscal year ended June 30, 2018 and the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2018 as soon as practicable."

USAT shares, which had already been knocked down by news of the accounting issues, fell another 50% today, leaving the company with a market cap of $204 million.

The board claims that RSM had not previously notified the audit committee of its concerns:

"During the last two fiscal years of the Company, and the subsequent period through February 1, 2019, and except as stated in the letter from RSM to the Audit Committee, there were no disagreements with RSM on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of RSM, would have caused RSM to make reference to the subject matter of the disagreements in their reports."