Veradigm Receives Expected Delisting Notice from Nasdaq
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Delisting from a major stock exchange is a significant financial event with material implications for a company's stock liquidity and investor perception. Veradigm Inc.'s announcement of its pending delisting from Nasdaq due to noncompliance with filing requirements suggests a critical lapse in financial reporting. This can erode investor confidence and may lead to a decrease in the stock's value due to perceived governance risks. Moreover, the transition to over-the-counter (OTC) trading typically results in reduced trading volumes and increased volatility, which could deter institutional investors who prefer the transparency and regulatory oversight of major exchanges.
While the company's intention to regain compliance is noted, the lack of a definitive timeline for filing the overdue financial reports adds uncertainty. Investors should monitor the company's progress closely, as the successful filing of these reports and the resolution of compliance issues could be a catalyst for a potential relisting, which would likely have a positive impact on the stock's performance. However, the mention of a 'make-whole fundamental change' indicates that the delisting could trigger clauses in debt agreements, potentially leading to financial repercussions that could affect the company's capital structure and cost of debt.
The noncompliance with Nasdaq Listing Rules 5250(c)(1) and 5620(a) reflects potential underlying legal and governance concerns. Nasdaq Listing Rule 5250(c)(1) requires timely financial reporting, which is crucial for maintaining market integrity and allowing investors to make informed decisions. The failure to file annual and quarterly reports could suggest issues ranging from internal control weaknesses to more significant financial irregularities. The noncompliance with Nasdaq Listing Rule 5620(a) could indicate governance challenges, as holding annual meetings is a fundamental aspect of shareholder rights and corporate accountability.
For stakeholders, the legal implications of noncompliance and delisting include a heightened risk of regulatory scrutiny and potential shareholder litigation. The company's decision not to appeal the delisting decision may be a strategic legal move to focus resources on rectifying the compliance issues rather than engaging in protracted legal proceedings with uncertain outcomes.
Delisting from a major exchange such as Nasdaq can significantly alter the market's perception of a company. It can serve as a negative signal to the market, potentially affecting not only the company's stock price but also its corporate image and relationships with partners, suppliers and customers. The anticipated move to OTC markets could limit exposure to a broader investor base, as OTC markets are generally less visible and accessible to the average investor.
However, for a healthcare data and technology company like Veradigm Inc., maintaining industry credibility is paramount. The ability to quickly resolve the compliance issues and communicate transparently with stakeholders will be crucial for restoring confidence. Furthermore, the impact on competitive positioning within the healthcare data sector should be considered, as peers may leverage Veradigm's delisting to attract customers or investors by highlighting their own compliance and stability.
Continues to Work Diligently Towards Regaining Compliance
The Decision indicates that trading in the Company’s common stock will be suspended effective February 29, 2024. The Decision also indicates that the Company may, within 15 calendar days from the date of the Decision, request that the Nasdaq Listing and Hearing Review Council review the Decision and that the Nasdaq Listing and Hearing Review Council may, on its own motion, determine to review any Panel decision within 45 calendar days after issuance of the written decision. The Company does not intend to request that the Nasdaq Listing and Hearing Review Council review the Decision.
As previously disclosed, the Company remains noncompliant with Nasdaq Listing Rule 5250(c)(1) because the Company has not filed its Annual Report on Form 10-K for the year ended December 31, 2022 (the “Form 10-K”) or its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2023 (the “Q1 Form 10-Q”), June 30, 2023 (the “Q2 Form 10-Q”) and September 30, 2023 (together with the Q1 Form 10-Q and the Q2 Form 10-Q, the “Form 10-Qs”). Also as previously disclosed, the Company remains noncompliant with Nasdaq Listing Rule 5620(a), which requires companies listing common stock to hold an annual meeting of stockholders no later than one year after the end of the company’s fiscal year.
The Company is working diligently to file the Form 10-K and the Form 10-Qs, and ultimately to regain compliance with all of the Nasdaq Listing Rules and restore its listing as soon as practicable; however, no assurance can be given as to the definitive date on which such periodic reports will be filed or whether the Company will ultimately regain compliance with all of the Nasdaq Listing Rules and return to being listed on The Nasdaq Global Select Market in the future.
While the Company’s common stock is suspended from trading on Nasdaq, the Company expects that its shares will be quoted on an over-the-counter market with its existing ticker symbol (MDRX).
The delisting also constitutes a “make-whole fundamental change” under the indenture pursuant to which the Company’s outstanding convertible notes were issued.
About Veradigm®
Veradigm is a healthcare technology company that drives value through its unique combination of platforms, data, expertise, connectivity, and scale. The Veradigm Network features a dynamic community of solutions and partners providing advanced insights, technology, and data-driven solutions for the healthcare provider, payer, and biopharma markets. For more information about how Veradigm is fulfilling its mission of Transforming Health, Insightfully, visit www.veradigm.com, or find Veradigm on LinkedIn, Facebook, Twitter, and YouTube.
Disclaimer and Forward-Looking Statement Information
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the Company’s efforts to regain compliance with the Nasdaq Listing Rules and expected trading activity in connection with the delisting and suspension of trading of the Company’s common stock. These forward-looking statements are based on the current beliefs and expectations of the Company’s management with respect to future events, only speak as of the date that they are made and are subject to significant risks and uncertainties. Such statements can be identified by the use of words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “continue,” “can,” “may,” “look forward,” “aim,” “hopes,” and similar terms, although not all forward-looking statements contain such words or expressions. Actual results could differ significantly from those set forth in the forward-looking statements.
Important factors that could cause a delay in filing the required financial statements and restoring the delisting include, but are not limited to, a further material delay in the Company’s financial reporting or ability to hold an annual meeting of shareholders, including as a result of the leadership changes announced in December 2023; an inability to timely prepare restated financial statements; unanticipated factors or factors that the Company currently believes will not cause delay; the impacts of the previously disclosed, ongoing independent investigation by the Audit Committee of the Board of the Company that relates to the Company’s financial reporting, internal controls over financial reporting and disclosure controls (the “Audit Committee Investigation”), including on the Company’s remediation efforts and preparation of financial statements or other factors that could cause additional delay or adjustments; the possibility that the ongoing review may identify additional errors and material weaknesses or other deficiencies in the Company’s accounting practices; the likelihood that the control deficiencies identified or that may be identified in the future will result in additional material weaknesses in the Company’s internal control over financial reporting; risks relating to the Company’s voluntary disclosure to the
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View source version on businesswire.com: https://www.businesswire.com/news/home/20240228670502/en/
Investors:
Jenny Gelinas
312-506-1237
jenny.gelinas@veradigm.com
Media:
Concetta Rasiarmos
312-447-2466
concetta.rasiarmos@veradigm.com
Source: Veradigm Inc.
FAQ
Why is Veradigm Inc. (NASDAQ: MDRX) facing delisting from Nasdaq?
When will trading of Veradigm Inc. (NASDAQ: MDRX) common stock be suspended?
Is Veradigm Inc. (NASDAQ: MDRX) planning to request a review of the decision to delist?
Where will Veradigm Inc. (NASDAQ: MDRX) shares be quoted after delisting?
How does the delisting of Veradigm Inc. (NASDAQ: MDRX) common stock affect outstanding convertible notes?
