Embattled US clothing firm American Apparel has received a stock exchange warning letter after it was not able to file a Quarterly Report on Form 10-Q in time.
The letter was sent by the New York Stock Exchange (NYSE), and states that the company’s timely filing of its quarterly report for the period ended 30 “is a condition for the company’s continued listing on the exchange”.
American Apparel has already submitted a plan of compliance on to the exchange in June, and intends to regain compliance by November. However, if the updated plan is not accepted, the company may be subject to delisting proceedings, a statement said.
American Apparel was not able to timely file the form due to the change in the company’s independent registered public accounting firm as disclosed in the company’s Form 8-K filed on 28 July. It said that its newly appointed auditors needed sufficient time to complete their review procedures for the quarter.
The company has faced a number of setbacks in recent months though, amid sloping sales and rising debt.
The vertically integrated clothing firm parted company with former auditors Deloitte Touche earlier this year, resulting in a threat of legal action from law firm Levi & Korsinsky, while American Apparel said it had received a subpoena from the US Attorney’s Office in New York, as well as an enquiry from the Securities and Exchange Commission.
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