On March 15, Hanger, Austin, Texas, filed a Current Report on Form 8-K with the U.S. Securities and Exchange Commission (SEC) stating that due to ongoing remediation of financial accounting and reporting processes, the existence of material weaknesses, and preparation of restated financial statements, certain of the company’s filings will be further delayed for an extended period of time.
Financial statements and certain related financial data have not yet been filed for the third quarter of 2014; the first, second, and third quarters of 2015 and 2016; and the full years ended December 31, 2014, 2015, and 2016. The company is working to complete its accounting processes and prepare its restated financial statements for 2012 and 2013 as well as its 2014 financial statements. Absent the discovery of any currently unforeseen issues or events, the company believes it will complete and file its Annual Report on Form 10-K for the year ended December 31, 2014, early in the second quarter. Separately, the company has begun the preparation of its 2015 and 2016 financial statements and certain related financial data, and is in the process of commencing the audit process for those years. However, due to the existing material weaknesses in its key controls, it will be necessary to undertake substantive testing and validation of the company’s financial accounting, thus delaying completion of those financial statements and the filing of the company’s Annual Report on Form 10-K for the year ended December 31, 2016, containing those financial statements.
The company currently believes that cash generated from operations, together with other available sources of liquidity, including borrowings that may be available under its credit agreement, will be sufficient for at least the next 12 months to fund anticipated capital expenditures, make required routine payments of principal and interest on debt, and pay the additional third party expenses that the company continues to incur as a result of the ongoing work relating to the filing of its financial statements. On December 31, 2016, Hanger had $6 million in cash and cash equivalents, $94.9 million in undrawn capacity available to it under the $118.3 million aggregate revolving commitment under its credit agreement, and $17.8 million in cash and financial instruments available to it in its bank accounts.
