Avid faces the prospect of being delisted from the Nasdaq after it warned investors that is was unlikely to meet a deadline set by the stock exchange for the restating of its financial statements.
The company had been given until March to amend discrepancies that date back to 2009, but Avid chief financial officer John Frederick said the task was “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…we do not, however, believe we will be able to achieve the March 14 deadline established by Nasdaq,” Frederick said.
Avid’s share price fell by more than 10% on the news.
The restatement relates to the way that Avid accounted for free software upgrades.
Avid said that under US accounting principles the updates should have been accounted for as “implied post-contract customer support”.
The company added that it has so far reviewed some 5 million transactions and 700 software releases.
Avid estimates that the cost of re-evaluating its accounts will be in the region of $25 million to $34 million.
As of December last year, the company’s cash balance was approximately $48 million.