PACS Group (NYSE: PACS) finally signaled progress in an ongoing federal investigation and internal audit of its billing practices, and also announced plans to extend the deadline for key financial reporting requirements.
In a filing with the Securities and Exchange Commission (SEC) Tuesday, PACS said there’s “substantial progress” in the investigation, and its personnel are actively cooperating with an independent audit committee investigation. The company cited the ongoing investigation as the reason for missing the deadline to report its quarterly and year-end financial results.
“[PACS] intends to file its annual report on form 10-K for the year ended December 31, 2024 as soon as practicable, following or concurrent with the company’s filing of the quarterly report on form 10-Q for the quarter ended September 30, 2024,” PACS stated in the SEC filing.
The Utah-based operator is undergoing a federal investigation following allegations made by an institutional short seller, the now-defunct Hindenburg Research, into the nursing home giant’s referral and reimbursement practices.
“[PACS] and its personnel have been and continue to be cooperating in the investigation, and the Audit Committee has made substantial progress towards reaching conclusions from the investigation,” the PACS’ filing further stated, noting that final quarter and year-end 2024 results will be delayed as well.
“As a result of the ongoing Audit Committee investigation, [PACS] has determined that it will not be able, without unreasonable effort or expense, to file its Annual Report on Form 10-K for the year ended December 31, 2024 by the prescribed due date for such annual report,” the filing noted.
The nursing home giant reached an agreement to delay releasing its financial results to lenders after it failed to share quarterly earnings – a federal requirement for publicly traded companies – over the last two quarters, the company stated in an SEC filing submitted late last week.
On March 27, PACS and its wholly-owned subsidiary, PACS Holdings, agreed to amend and restate a credit agreement with Truist Bank and lenders to deliver audited annual financial statements.
PACS amended its credit agreement, extending the deadline for delivering audited financial statements from 90 to 135 days after the fiscal year’s end, with the possibility of further extension by written agreement.
On the basis of the investigation, several PACS’ executives are currently facing a shareholder lawsuit – filed on March 21 – over the alleged scheme to submit false Medicare claims.
