By James DeRuvo (doddleNEWS)
As delisting from the NASDAQ stock exchange looms in the Spring, Avidcontinues to make moves to shore up its executive structure, and has also hired a new audit and accounting firm to review it’s financial status as it prepares for what may be a last ditch effort to regain compliance to the FEC.
“While the scope of the project is more involved than the company first expected, I believe that we have comprehensively assessed the revenue restatement and have a clear view to complete that work,” said John Frederick, Avid’s CFO, “We look forward to working with our new audit team to deliver the audited financial statements to be included in our next annual report … as expeditiously as possible. We do not, however, believe we will be able to achieve the March 14, 2014, deadline established by NASDAQ.”
Citing that the appointment of Deloitte & Touche to replace Ernst & Young was “not the result of any disagreement, or of any matter of accounting principal or practice,” Avid hopes to reverse it’s financial course and get the required back reports in for the FEC to again consider staying their delisting. If they can catch up on their financial reports by March, that could be the case, but the FEC has given them until March to make it’s best case.
And getting a “fresh set of eyes” on their financial earnings going back to 2009 may be just what the beleaguered tech company needs to regain compliance. But Avid admits that it is unlikely to make the March deadline and as such, it could be that trading of all shares of Avid stock will cease on NASDAQ as of the March 14th deadline. But that doesn’t mean that the company will stop being public. Being delisted on the NASDAQ exchange will place them in the “pink tier” of the OTC markets, which will allow further trading until the company regains compliance.
One of the issues that new accountants will look at is how Avid treated updates to their software as free bug fixes, rather than post contract customer support. The review involves auditing over five million transactions and 700 software releases dating back to 2009. The only bright side of late is that in reviewing the company’s balance sheet, Avid has nearly $50 million in the bank and no outstanding debt, with cash expendatures in 2014 expected to be well within their margins.
In addition to naming Deloitte and Touche their new accounting firm, Avid also announced the elevation of several executives to the position of Vice President. Rick Lowenstein, formerly with Adobe, has been named Senior VP of Customer Success and Professional Services, while Mitch Weaver signs on as VP of Software Development.
Additionally, Avid named David Mash of Berklee College of Music as chairman of Avid Customer Association’s board of directors, along with Fox Network’s Richard Friedel and German Television Executive VP Andrewas Bereczky, who will act at the ACA’s vice chairmen. “These appointments are part of our ongoing efforts to develop deeper customer relationships and to remain at the forefront of innovation with solutions that solve our customers’ most pressing current and future challenges,” said Avid CEO Louis Hernandez Jr. in a prepared statement.
So while things look really good moving foward for Avid, it remains to be seen if their immediate past will continue to catch up with them.