Item 4.02(a) Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On October 28, 2019, the Company, in consultation with the Audit Committee of its Board of Directors (the “Audit Committee”), concluded that the Company’s previously issued unaudited consolidated financial statements for the three and nine months ended September 30, 2017, which are included in the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2017, and the unaudited consolidated financial information for the three months ended December 31, 2017, which is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, should no longer be relied upon due to material misstatements. On October 29, 2019, the Company issued a press release regarding the reasons underlying these misstatements. A copy of this press release is furnished as Exhibit 99.2 hereto.
In addition, the Company has reassessed its conclusions regarding the effectiveness of its internal control over financial reporting as of December 31, 2018 in light of the misstatements described above. As a result, the Company has determined that certain material weaknesses existed as of December 31, 2018 and subsequently, and therefore the Company has concluded that its internal control over financial reporting as of December 31, 2018 was not effective and that Management’s Report on Internal Control over Financial Reporting as of December 31, 2018 should also no longer be relied upon.
As a result of the foregoing, the Company plans to amend its Annual Report on Form 10-K for the year ended December 31, 2018 to:
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restate the unaudited quarterly financial data for the three month periods ended September 30, 2017 and ended December 31, 2017 set forth in Note 17 - Quarterly Financial Information (Unaudited) (including restatement related information for the nine months ended September 30, 2017); and
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restate Management’s Report on Internal Control over Financial Reporting included under Item 8 and correspondingly, to restate the Evaluation of Disclosure Controls and Procedures included under Item 9A.
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In addition, the Company will revise its previously issued 2018, 2017 and 2016 annual financial statements, as well as the financial information of certain relevant unaudited interim periods within 2018 and 2017 to correct for other immaterial misstatements. Also, the unaudited interim financial statements for the three months ended March 31, 2019 and six months ended June 30, 2019 will be revised prospectively, to correct for other immaterial misstatements.
The Company has discussed these matters with its independent registered public accounting firm, PricewaterhouseCoopers LLP, who will also be reissuing its audit report to reflect an adverse opinion on the Company’s internal control over financial reporting as of December 31, 2018.