The voters for Richmond haven’t decided yet if they want a new casino. However, the new events stole the spotlight when one of the companies included in this major project came under suspicion for financial reporting irregularities.
Possible delisting from the stock market:
If proven true, it can lead to a complete ban from the stock market.
The company from Maryland, Urban One, was supposed to back the new Richmond Grand Resort and Casino along with Churchill Downs from Kentucky.
The federal government has strict financial reporting requirements, which the company hasn’t met.
One of the managing partners in Harris Financial Group, Jamie Cox, said: “In general, when a company gets a delisting notice or gets put on notice that they’re potentially going to be delisted, that means that it’s sort of the end of the line of a series of missteps over the past six or seven months.”
As Cox explained, financial reporting is necessary in order to help investors make the right decisions when it comes to investing in certain companies.
Urban One received the first warning in April when the company skipped the deadline for submitting the report for 2022. In May, the company didn’t fill the report for the first quarter of 2023. It was given an extension until September, but even that deadline passed without submitting reports, which is, according to Cox, unusual. He claimed that this can suggest some issues hidden beneath the surface.
According to Urban One, the main reason behind this course of events lies in the accounting errors related to the investment in the Richmond casino, as well as mistakes “with regard to the timing of expense recognition of non-cash stock-based compensation.”
The hope for Urban One:
All possible delisting actions will be suspended until the hearing, which will be held on October 20 before the Nasdaq Hearing Panels, and the company hopes it will be able to get the extension until March 23.
The company’s spokesperson said: “This event does not impact our day-to-day business. We remain in a strong financial position and last week updated our financial guidance for the year. Our commitment to our investors, to our millions of viewers and listeners, and to our Richmond resort casino project remain unchanged.”
On the other hand, Cox thinks the delisting could shake the investors’ trust in Urban One, which can affect the casino project. But the company does whatever it takes to address the issues, so hopefully, the situation will change soon.
In July, the company fired the public accounting company they were working with. As 06 News Richmond reports, the Churchill Downs spokesperson didn’t want to comment since it isn’t related to the new casino project.