Fusion Connect -83% as audit problems prompt Chapter 11 analyst warning

• Fusion Connect (NASDAQ:FSNN) -83.3% pre-market after disclosing it would be unable to file its 2018 annual report on time due to the need for additional time to quantify the impact of Birch's accounting errors.
• The actual amount of necessary financial restatements will not be known until all audit work is completed, but FSNN currently estimates restatements of $2.3M-$3M for FY 2017, $3.4M-$4.1M for the September 2018 quarter and $1.7M-$2.3M for the June 2018 quarter.
• B. Riley FBR downgrades FSNN to Neutral from Buy and slashes its stock price target to $0.75 from $9.75, saying the company's options are limited, given its financial leverage and limited access to capital, and a formal Chapter 11 reorganization "appears to be a material possibility."