It hasn’t exactly been a great year for stockholders of Troika Media (NASDAQ:TRKA), as shares of the company are down by over 50% year-to-date (YTD). On Nov. 14, Troika warned that it would be late in filing its Form 10-Q, or earnings report, for the period ended Sept. 30. The company stated that it expected to fail financial and non-financial covenants in regards to its financing agreement with Blue Torch Capital and other parties, which could result in changes in its financial position.
“The company is working diligently to complete the Q3 2023 Form 10-Q as soon as possible, but anticipates that it will be unable to do so within the extension period of five calendar days following November 14, 2023,” said Troika.
TRKA Stock: Troika Receives Nasdaq Delinquency Notice for Late Earnings
On Nov. 17, Nasdaq provided Troika with a delinquency notification letter due to the company failing to file its third-quarter earnings on time. Troika must now submit a plan of compliance explaining how it expects to remedy the delinquency within 60 days. The company can also choose to file its earnings before the end of the 60-day period. As of now, Troika has not provided a timeline on when it will be able to file its earnings.
Back in March 2022, Troika acquired Converge Direct for $125 million, consisting of $100 million in cash and $25 million in restricted common stock priced at $2 per share. As part of the acquisition, Troika received $75 million first lien term loan from Blue Torch. The outside date between the two parties, which concerns the deadline for an event of a refinancing event or sale, has since been extended several times. After several extensions, the outside date was due to expire on Nov. 17. Troika and Blue Torch then agreed to extend the date to Nov. 29.
“If the Company is unsuccessful in curing the continuing events of default by the expiration of the Waiver Period, the Company intends to seek further Limited Waivers with Blue Torch, although we cannot assure you that Blue Torch would be willing to grant additional waivers,” said Troika.
Upon failure of the conditions, Troika will be in default of its agreement, which would allow its lenders to “exercise remedies available to them under the Financing Agreement.”
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
