USP gets SGX RegCo compliance notice, must undergo audit and exit watch list or extend cure period

WATCH-LISTED USP Group on Tuesday (Apr 11) was handed a notice of compliance from bourse regulator Singapore Exchange Regulation (SGX RegCo), after it failed to audit its most recent full-year financial statements before the end of its cure period on Dec 22, 2022.

It is now required to appoint auditors to carry out an audit by May 31, 2023, for its financial statements for the financial year (FY) ended Mar 31, 2023, and announce the results by a deadline agreed with the exchange.

Then, based on the results, it must apply to either be removed from the watch-list, or to extend the cure period, by a deadline to be agreed with SGX.

If USP Group does not comply, the exchange will move to delist the company. It will also be deemed to have contravened the listing rules.

At its annual general meeting in February 2022, the company announced that Baker Tilly TFW LLP had retired as its auditors. It said that it would appoint new auditors in due course – which the company has not yet done, the SGX RegCo notice said.

Based on SGX listing rules, within 36 months from being watch-listed, a company may apply to exit the list if its audited full-year consolidated accounts record consolidated pre-tax profit for the most recently completed FY, and it has an average daily market capitalisation of S$40 million or more over the last six months.

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It can also apply for an extension to the 36-month cure period, after which it may be granted up to 12 additional months, if the company satisfies at least one of the above requirements and has achieved healthy cash flow from its operating activities, based on recent audited accounts.

As USP Group has yet to produce audited full-year financial statements, it is unable to demonstrate that it has fulfilled the watch-list exit criteria and/or provide basis for SGX to consider if an extension to its cure period is warranted, the notice said.

Shares of USP Group closed flat at S$0.10 on Tuesday, before the announcement.