Veradigm asks CEO, CFO to step down

Veradigm CEO Richard Poulton and CFO Leah Jones have resigned from their roles at the request of the board. Mr. Poulton has also stepped down from the board while Ms. Jones will serve in a consulting role to provide business-development related services to the company.

Eight things to know:

1. Veradigm, an EHR vendor formerly known as Allscripts, has appointed current chair Greg Garrison, as executive chair, and current director Shih-Yin Ho, MD, as interim CEO. 

2. Carol Zierhoffer was appointed as lead independent director following Mr. Garrison's appointment as executive chair. Lee Westerfield, who most recently served as CFO at Clearsense, will serve as Veradigm's  interim CFO. 

3. The leadership changes come six weeks after Veradigm received a notice from Nasdaq stating that its shares would be delisted due to noncompliance. Veradigm said it planned to appeal the decision, which was made after it did not file its annual report on form 10-K for the year ending Dec. 31, 2022, its quarterly report on form 10-Q for the quarter ending March 31, 2023, or a quarterly report on form 10-Q for the quarter ending on June 30, 2023.

4. Veradigm was supposed to file these forms before the expiration of a 180-day exception period previously granted by Nasdaq but said it could not file due to "internal control failures that primarily stem from accounting processes and a software tool," according to a Sept. 22 news release. 

5. An independent investigation related to Veradigm's financial reporting and internal controls is being conducted by legal counsel. Any potential impact to financial statements for previously reported periods as a result of the investigation is under review by the new leadership team.

6. Veradigm's board is conducting a search for a permanent CEO and CFO. It aims to retain an executive search firm to support the process, which it said will include both internal and external candidates.

7. The new leadership team is reviewing the fiscal year 2023 guidance issued on Sept.18, 2023, and said it is committed to regaining compliance with Nasdaq listing requirements as soon as possible.

8. Unrelated to the investigation, Veradigm estimates a reduction in revenue from continuing operations of about $20 million in the aggregate between the periods 2020 through the end of 2022 relating to certain revenue recognition practices.

"Veradigm's core business remains strong but, after careful review and consideration, it is clear that we must develop a stronger financial control environment with enhanced financial reporting policies and disclosure policies and procedures," Mr. Garrison said. "We are pleased to bring in seasoned, deeply experienced executives of Yin and Lee's caliber. I look forward to working with them, as well as president and chief commercial officer Tom Langan, as we lead the company through this important transition period."

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