Paragon 28(FNA) GlobeNewswire News Room·2024-08-26 20:13Company Performance and Financial Issues - Paragon 28 Inc experienced a sharp 22% decline in its share price on August 9, erasing hundreds of millions of dollars in shareholder value [1] - The company revised its full-year revenue forecast to $249 million to $255 million, down from the previous range of $249 million to $259 million [2] - Paragon 28 is implementing cost-cutting measures, including laying off approximately 7% of its workforce, reducing inventory, and adjusting executive compensation [2] - The company revealed accounting irregularities, with material weaknesses in internal controls and significant accounting errors, including a 19% understatement of cost of goods sold, leading to a 22% overstatement of operating loss and a 20% overstatement of net loss [4] - The stock has fallen over 56% in the past year, raising concerns about the company's financial health [5] Leadership Changes and Investigation - Kristina Wright, interim CFO since April, was replaced by Chadi Chanine, formerly of Zimmer Biomet Holdings [3] - CFO Stephen Deitsch's abrupt resignation on April 4, 2023, indicated potential issues with the company's financial reporting [3] - Hagens Berman, a shareholder rights firm, is investigating potential violations of U.S. securities laws, focusing on the connection between Paragon 28's poor outlook and past improper accounting [5] Industry and Legal Context - Hagens Berman, a global plaintiffs' rights litigation firm, has secured over $2.9 billion in cases related to corporate accountability [7] - The firm is encouraging investors with substantial losses or individuals with knowledge to assist in the investigation, with potential rewards for whistleblowers under the SEC Whistleblower program [6]