UPDATE: Sept. 25, 2023: Veradigm has received notice that its shares will be delisted from the Nasdaq after the health IT company failed to file required financial paperwork before the end of the 180-day grace period.
Nasdaq sent the delisting notice last week. Veradigm said it plans to appeal the decision and request a hearing before a panel, which will delay any suspension or delisting for another 22 days, and could result in an additional extension period.
Veradigm “believes that is satisfies” the requirements to get an extended stay, though the final decision will be made by the panel, the Chicago-based company disclosed in a Sept. 22 filing with the SEC.
Dive Brief:
- Veradigm received a notice from the Nasdaq on Friday warning the health IT company that it’s still noncompliant with the exchange’s listing requirements.
- Veradigm, which used to be called Allscripts, has yet to file its annual report for 2022, or its quarterly reports for the first and second quarters of 2023. Filing reports with the Securities and Exchange Commission is required for listing on the exchange.
- Veradigm said it plans to submit an update to its compliance plan before the end of the month.
Dive Insight:
Veradigm has been noncompliant with the Nasdaq since March for not filing timely periodic reports with federal regulators. The Chicago-based health IT company received notices from the stock exchange on March 20 and May 18 and received its third notice last week.
The company said it’s been unable to file the financial reports due to internal control failures stemming from accounting problems and a software tool it used to comply with Financial Accounting Standards Board requirements for recognizing revenue from customer sales.
A Veradigm spokesperson declined to share more details on the accounting errors.
The company’s board first determined in March that previous financial disclosures in 2021 and 2022 couldn’t be relied on due to incorrect previously reported revenue. Those financial statements included some duplicate transactions and other errors, according to a filing with the SEC on August 10.
Since then, Veradigm has expanded its audit procedures to additional transactions and time periods but says it needs more time to finish oversight.
“The work effort to conclude on the nature and the extent of the accounting and internal control errors, and the estimates on what periods the errors impact has taken longer than previously expected, and the Company’s independent auditors need more time to complete their audit procedures,” Veradigm disclosed in June.
Along with 2023 disclosures, Veradigm plans to restate previously reported results for 2021 and 2022. The cumulative impact is expected to reduce revenue from continuing operations by roughly $40 million across those two years.
The company said it hopes to file the forms by September 18, the end of the 180-day ‘exception period’ under Nasdaq’s listing rules.
The notices don’t have an immediate effect on Veradigm’s stock on the Nasdaq. However, the health IT vendor could be delisted from the Nasdaq if it fails to comply with the exchange’s listing requirements.
Despite not sharing specific financials, Veradigm set out financial guidance for the 2023 fiscal year in March. The company expects to bring in revenue of between $615 million and $635 million this year — lower than previous forecasts.
The company rebranded from Allscripts to Veradigm in January, as part of ongoing restructuring following a difficult few years. Veradigm began streamlining its corporate portfolio starting in 2020, including selling its underperforming hospital and large practice EHR segments.
