Driven Brands Faces Nasdaq Delisting Warning Due to Late Quarterly Report

Driven Brands Holdings Inc. has received a notification from Nasdaq indicating non-compliance with listing rules because of its delayed quarterly financial statement submission. The company is now required to outline its plan to regain compliance and avoid potential delisting.

Driven Brands Holdings Inc., a prominent automotive services company, has been issued a non-compliance notice from Nasdaq. This notification stems from the company's failure to submit its quarterly financial report, known as a 10-Q filing, to the Securities and Exchange Commission (SEC) within the stipulated timeframe. According to Seeking Alpha, the notice, dispatched on May 15, 2024, informs Driven Brands that it is not in adherence to Nasdaq's Listing Rule 5250(c)(1). This particular rule mandates that all listed companies must file their periodic financial reports with the SEC promptly. The automotive service franchisor disclosed that the delay in its 10-Q filing for the quarter ending March 31, 2024, is primarily due to an ongoing review of its financial statements. This review is specifically focused on the accounting practices related to its acquisition of a car wash business. The company is currently evaluating the historical accounting for certain non-cash items, an assessment that commenced during the preparation of its fiscal year 2023 financial statements. Driven Brands has indicated that this accounting review could potentially lead to a restatement of its previously issued financial statements for past periods. The company has until July 14, 2024, to submit a comprehensive plan to Nasdaq addressing how it intends to resolve the late filing and regain compliance with the listing requirements. If Nasdaq accepts this plan, the company could be granted an extension of up to 180 calendar days from the original filing due date—which was May 15, 2024—to complete the delayed report. The company emphasized its commitment to resolving the matter swiftly and regaining full compliance with Nasdaq's regulations. It plans to provide updates as the situation progresses and the review of its financial accounting is finalized. The outcome of the current accounting examination will determine the necessary adjustments and filing schedule moving forward.