Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
As previously disclosed in the Form 12b-25 filed by the Company on November 13, 2018, the Companys Audit Committee is conducting a review to assess the
accuracy of the Companys previously filed financial statements, the current focus of which is to review the extent to which the Company incorrectly recognized revenue with respect to bill and hold transactions beginning in 2014 until the
second quarter of fiscal 2018, the period for which it used bill and hold revenue accounting, and whether the Companys accounting for those transactions led to material errors in its financial statements.
On December 10, 2018, the Audit Committee, upon the recommendation of the Companys management, concluded that, as a result of the information obtained
to date in connection with the ongoing review, the Companys consolidated financial statements as of and for each of the following fiscal periods should no longer be relied upon:
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the fiscal quarters ended March 31, 2018 and June 30, 2018;
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the fiscal year ended December 31, 2017 and each fiscal quarter therein;
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the fiscal year ended December 31, 2016 and each fiscal quarter therein; and
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the fiscal year ended December 31, 2015 and each fiscal quarter therein.
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To date, the Audit Committees review has focused principally on the analysis of selected bill and hold transactions in 2016. Based on currently
available information and documentation, the Company has identified apparent errors in its previously filed financial statements for 2016, the correction of which would be material to its previously filed financial statements for 2017. If additional
information with respect to the selected 2016 transactions becomes available, this conclusion may be reassessed. The Audit Committee will continue to assess the accuracy of the Companys previously filed financial statements for the fiscal
periods listed above, and will assess the impact of the errors on the Companys disclosure controls and procedures and internal control over financial reporting.
Accordingly, until the Company has either restated its financial statements for the periods described above or determined that no such restatements are
warranted, investors, analysts and other persons should not rely upon the Companys previously released financial statements for these periods, including those included in the Companys Annual Reports on Form 10-K and its Quarterly Reports
on Form 10-Q, or any press releases, investor presentations or other communications that relate to that information. Additionally, the Audit Committee has determined that the related reports on the consolidated financial statements and internal
control over financial reporting for the fiscal years ended December 31, 2017, 2016 and 2015 of the Companys independent registered public accounting firm, RSM US LLP, should also no longer be relied upon. The Audit Committee has discussed the
matters disclosed in this Item 4.02 with RSM US LLP.
Because the Audit Committees review of the transactions with respect to which the Company used
bill and hold revenue accounting to recognize revenue is ongoing, the Company has not determined the aggregate amount of previously-recognized revenue that has been affected, nor has it determined the amount of such revenue to be recorded in any
specific prior period or in any future period. The Company believes that the impact of corrections to the timing of revenue recognition on bill and hold transactions in previous annual fiscal periods is not likely to materially exceed the amounts
set forth in its Form 12b-25 filed on November 13, 2018. The Company expects that expenses arising from the Audit Committees review and any restatement of financial statements, which will be recorded in the periods incurred, will be
significant.
Forward-looking statements
Except for
statements of historical fact, the matters discussed herein are forward-looking statements within the meaning of the applicable securities laws and regulations. The words estimates, expects, believes
and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements, including statements regarding the extent of errors and their
possible impact on the Companys previously filed financial statements involve risks and uncertainties. Factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to,
the availability or non-availability of additional information with respect to the Companys bill and hold transactions, the time, effort and expense required to complete the Audit Committees review, the extent of any adjustments required
to be made in any revised financial statements, and the other risks described more fully in the Companys filings with the SEC. Forward-looking statements reflect the views of the Companys management as of the date hereof. The Company
does not undertake to revise these statements to reflect subsequent developments.