The Company is a cloud-enabled, Platform-as-a-Service company providing services to healthcare providers that assist in creating, managing, coding, billing, and analyzing medical records.
The Company is a virtual company with no physical office location and employs nearly 40 full-time employees and 165 independent contractors.
FDP was engaged by the senior lender’s legal counsel due to concerns over financial reporting and a current over-advance on the line of credit.
FDP was engaged to evaluate the credit relationship between the senior lender and the Company.
Based on our detailed review, FDP uncovered material financial reporting misstatements, principally related to the consolidation of legal entities not owned by the Company.
–When corrected, the over-advance on the line of credit would have been reported much earlier and the operating losses would have increased significantly.
Additionally, FDP reviewed current progress related to the marketing of the Company and determined that significant progress had not been achieved.
Finally, upon review of the Company’s cash flows, FDP determined the Company did not have adequate liquidity to fund operations.
As a result, the senior lender planned to exit the credit before a substantial loss could be incurred.
FDP identified significant financial misstatements reported to the senior lender.
FDP determined that the Company did not have sufficient cash flows to properly operate.
Based on our work, the senior lender moved to exit the credit and avoid a significant loan loss.