Expects Not to File Required Financial
Statements by Nasdaq’s February 27, 2024 Deadline
Working Diligently to File Required Financial
Statements and Restore Listing
Adopts Limited Duration Stockholder Rights
Plan
Veradigm Inc. (NASDAQ: MDRX) (the “Company”), a leading provider
of healthcare data and technology products and solutions, announced
today that the Company does not expect to have filed its Annual
Report on Form 10-K for the year ended December 31, 2022, or its
Quarterly Reports on Form 10-Q for the quarters ended March 31,
2023, June 30, 2023 and September 30, 2023, by February 27, 2024,
the deadline that The Nasdaq Stock Market LLC (“Nasdaq”) has given
the Company to regain compliance with Nasdaq Listing Rule
5250(c)(1).
The Company anticipates it will receive a delisting notice from
Nasdaq on February 28, 2024, and that its common stock will be
suspended from trading on The Nasdaq Global Select Market while
Nasdaq proceeds with delisting. The Company plans to provide
additional information regarding the anticipated delisting after it
receives the expected notice from Nasdaq.
The Company is working diligently to file its required financial
statements, and ultimately to regain compliance with all of the
Nasdaq Listing Rules and restore its listing as soon as
practicable.
Stockholder Rights Plan
The Company also announced that its Board of Directors (the
“Board”) has unanimously adopted a limited duration stockholder
rights plan (the “Rights Plan”) in anticipation of notification
from Nasdaq that it will suspend trading in the Company’s
stock.
The Board believes that the current trading price of Company
common stock does not reflect the Company’s intrinsic value. The
Rights Plan is intended to enable the Company’s stockholders to
realize the long-term value of their investment, ensure that all
stockholders receive fair and equal treatment in the event of any
proposed takeover of the Company and guard against tactics to gain
actual or de facto control of the Company without paying all
stockholders an appropriate premium for that control. The Rights
Plan does not prevent the Company from pursuing any offer that is
fair and otherwise in the best interests of stockholders.
The Rights Plan was adopted by the Board following evaluation
and consultation with the Company’s advisors and is similar to
plans adopted by numerous publicly traded companies. Given the
Company’s current market capitalization, the Company’s current cash
on-hand, the Company’s anticipated continued profitability, the
anticipated delisting of Company common stock from Nasdaq and the
anticipated substantial and volatile trading activity in connection
with the expected Nasdaq suspension of trading in the Company’s
stock, the Board determined that the Company and its stockholders
are particularly vulnerable to a creeping acquisition of actual or
de facto control, whereby an investor could acquire a substantial
percentage of outstanding shares of Company common stock prior to
making any public disclosure regarding its control intent and
without paying a control premium.
The Rights Plan is intended to enable all Company stockholders
to realize the full potential value of their investment in the
Company and to protect the interests of the Company and its
stockholders by reducing the likelihood that any person or group
gains control of the Company through open market accumulation or
other tactics without appropriately compensating all stockholders.
The Rights Plan was not adopted in response to any specific
proposal to acquire control of the Company or any action by any
activist investor.
The Rights Plan is effective immediately and, unless terminated
earlier pursuant to its terms, will expire on February 26, 2025. So
long as no stockholder has exceeded the thresholds described below,
the Board may terminate the Rights Plan prior to the scheduled
expiration date, including if the Board determines that there is no
longer a threat to shareholder value. Pursuant to the Rights Plan,
the Company will issue, by means of a dividend, one preferred share
purchase right for each outstanding share of Company common stock
to stockholders of record on the close of business on March 8,
2024. Initially, these rights will not be exercisable and will
trade with, and be represented by, shares of Company common
stock.
Under the Rights Plan, the rights would become exercisable only
if a person or group (each, an “acquiring person”) acquires
beneficial ownership of 10% (or 20% in the case of eligible passive
investors) or more of the outstanding shares of Company common
stock (including in the form of synthetic ownership through
derivative positions) in a transaction not approved by the Board.
In that situation, each holder of a right (other than the acquiring
person, whose rights will become void and will not be exercisable)
will have the right, upon payment of the exercise price and in
accordance with the terms of the Rights Plan, to purchase
additional shares of Company common stock at a 50% discount. The
Board, at its option, may, rather than permitting the exercise of
the rights, exchange each right (other than rights held by an
acquiring person that have become null and void) in whole or in
part, at an exchange ratio of one share of Company common stock per
outstanding right, subject to adjustment. Except as provided in the
Rights Plan, the Board is entitled to redeem the rights for $0.001
per right.
If a stockholder beneficially owns 10% (or 20% in the case of
eligible passive investors) or more of the outstanding shares of
Company common stock at the time of the announcement of the Rights
Plan, then that stockholder’s existing ownership percentage will be
grandfathered, although, with certain exceptions, the rights will
become exercisable if at any time after the announcement of the
Rights Plan such stockholder increases its ownership of Company
common stock.
Further details about the Rights Plan will be contained in a
Form 8-K to be filed by the Company with the Securities and
Exchange Commission.
J.P. Morgan Securities LLC is serving as financial advisor and
Sidley Austin LLP is serving as legal counsel to the Company.
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, the anticipated delisting and
suspension of trading (including the timing and effects thereof),
expected trading activity in connection with such delisting and
suspension, the Company’s expected continued profitability and the
Company’s planned communications with stockholders. 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. There can be no assurance that the Board will terminate
the Rights Plan prior to its expiration date.
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
stockholders, 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 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 U.S. Securities and
Exchange Commission (the “SEC”) of information concerning the Audit
Committee Investigation; risks relating to the putative securities
class action lawsuit filed against the Company and any other future
litigation or investigation relating to the Audit Committee
Investigation and other factors contained in the “Risk Factors”
section and elsewhere in the Company’s filings with the SEC from
time to time, including, but not limited to, the Company’s Annual
Report on Form 10-K, the Company’s Current Reports on Form 10-Q and
its Current Report on Form 8-K filed on January 10, 2024. The
Company does not undertake to update any forward-looking statements
to reflect changed assumptions, the impact of circumstances or
events that may arise after the date of the forward-looking
statements, or other changes over time, except as required by
law.
© 2024 Veradigm Inc. and/or its
affiliates. All rights reserved.
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version on businesswire.com: https://www.businesswire.com/news/home/20240226723847/en/
Investors: Jenny Gelinas
312-506-1237 jenny.gelinas@veradigm.com Media: Concetta Rasiarmos 312-447-2466
concetta.rasiarmos@veradigm.com
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