Veradigm Inc. (MDRX) announced today that the work effort to conclude on its previously disclosed accounting and internal control errors has taken longer than previously expected, and more time is needed to complete its audit procedures. As such, today the Company will not be filing its Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”), or its Quarterly Reports on Forms 10-Q for the quarters ended March 31, 2023, and June 30, 2023 (the “Form 10-Qs”). The Company currently expects to file the Form 10-K and Forms 10-Q during the fourth quarter of 2023. The extended timeline has primarily resulted from the need to build a new supplemental revenue system tool and the extensive manual work to aggregate and map the Company’s historical transaction data into the new system tool.
Because the Company will not regain compliance with Nasdaq Listing Rule 5250(c)(1) within the 180-day “exception period” provided by Nasdaq, the Company anticipates that it will receive a delisting notice. However, the Nasdaq Listing Rules provide that the Company may request a hearing before a Nasdaq Hearings Panel (the “Panel”) and that the request will temporarily stay any suspension or delisting action for 22 days from the date of the Nasdaq notification. Further, the Listing Rules provide that, in its hearing request, the Company may request that the stay remain in effect through the hearing and the expiration of any additional extension period granted by the Panel. Accordingly, the Company intends to make such an extended stay request. While the determination on whether to grant the stay will be made by the Panel, the Company believes that it satisfies the standards for the granting of such an extended stay.
The Company previously estimated that the cumulative impact of the accounting and internal control errors would be a reduction in revenue from continuing operations of approximately $40 million in the aggregate from what it otherwise reported or expected to report for the periods 2020 through the end of 2022. The Company is now revising the estimated cumulative impact down to approximately $20 million for these same reporting periods.
The Company is affirming the following financial guidance for Fiscal 2023 issued on March 22, 2023:
- Revenue is expected between $615 million and $635 million
- Non-GAAP earnings per share is expected between $0.80 and $0.90
The Company is also introducing initial financial guidance for Fiscal 2023 as follows:
- Non-GAAP Adjusted EBITDA is expected between $160 million and $170 million
Despite the challenges posed by the extended audit timeline and the revision of cumulative impact estimates, Veradigm Inc. remains committed to its financial targets for the fiscal year 2023.