Item 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
As disclosed on
As disclosed on
On
On
The Investigation is now substantially complete. The Company's management and Audit Committee have initiated the remediation process to address the errors and issues identified by the Investigation, including personnel actions, changes to internal controls and enhancements to accounting resources and training. The recently appointed interim chief executive and chief financial officers are leading the Company's efforts to apply the findings of the Investigation to the remediation and restatement processes.
The errors and issues identified by the Investigation include errors in the recognition of revenue for sales to various customers resulting primarily from (1) a failure of certain sales personnel in certain cases to disclose relevant terms they had negotiated with customers and a failure to identify, consider and properly account for such terms, (2) a failure to consider fully the impact of certain terms of sales agreements with customers in determining the amount and timing of revenue to be recognized and (3) a failure to adequately assess collectability. The Investigation also identified errors in certain key performance indicators, including "bookings" and related metrics. The Company ceased presenting bookings-related metrics in the 2021 Annual Report, and those metrics should no longer be relied upon. The errors and issues occurred at various times throughout the Affected Periods. The description of the errors and issues is solely based on the results of the Investigation conducted to date, and the errors and issues are subject to further analysis as the Company completes the restatement process. The results of the restatement will be subject to audit by the Company's independent registered public accounting firm. The Company plans to file amended annual and quarterly reports, as applicable, for the Affected Periods as soon as reasonably practicable.
The Company expects to conclude that one or more material weaknesses related to the matters described above existed in the Company's internal controls over financial reporting for the Affected Periods and that the Company's controls and procedures for such periods were not effective. An assessment of the Company's internal
--------------------------------------------------------------------------------
controls and the Company's remediation plan with respect to such material weaknesses will be described in more detail in the amended annual and quarterly reports for the Affected Periods.
The Company's management and the Audit Committee have discussed the matters disclosed in this report with Deloitte.
Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements
within the meaning of the federal securities laws, including statements
regarding adoption of the Company's technology and products. These
forward-looking statements generally are identified by the words "believe,"
"project," "expect," "anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "should," "would," "will continue," "will likely
result" and similar expressions. Forward-looking statements are predictions,
projections and other statements about future events that are based on current
expectations and assumptions and, as a result, are subject to risks and
uncertainties. Forward-looking information includes, but is not limited to,
statements regarding: the Company's future products, performance and operations,
and the related benefits to stockholders, customers and residents; the
Investigation and the impact of the findings thereof on the Company's financial
statements, results of operations and strategy; the Company's restatement and
remediation plan; and the Company's strategy. Many factors could cause actual
future events to differ materially from the forward-looking statements in this
document, including the Company's ability to implement business plans and
changes and developments in the industry in which the Company competes. The
foregoing list of factors is not exhaustive. You should carefully consider the
foregoing factors and the other risks and uncertainties described in the "Risk
Factors" section of the Company's Annual Report on Form 10-K filed with the
--------------------------------------------------------------------------------
© Edgar Online, source