Healthcare technology company Veradigm disclosed it expects it misstated revenue by approximately $40 million during its 2021 and 2022 reporting periods.
Veradigm previously disclosed it misstated revenues going back to the third quarter of 2021 by $20 million, but an expanded audit discovered additional problems leading to the updated total, the company stated in a regulatory filing with the Securities and Exchange Commission (SEC) on Wednesday.
The company said its quarterly reports and year-end reports from March 2021 through September 2022 should not be relied on. The misstatements were made because of internal control over financial reporting (ICFR) deficiencies, the company said.
As of Dec. 31, 2022, the company said its disclosure controls, procedures, and ICFR were not effective. Veradigm has delayed filing its annual Form 10-K report for the fiscal year ended Dec. 31, 2022, but intends to “as soon as practicable.”
The ICFR failures stem from accounting processes and a revenue recognition software tool the company put in place to comply with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 606.
“Testing during the fiscal quarter ended December 31, 2022, highlighted some duplicate transactions and other errors impacting the results the company had reported,” the disclosure stated.
Veradigm said it expects to report in its 2022 10-K one or more material weaknesses and its remediation efforts regarding recognition of revenue and other nonroutine review controls.
The company disclosed Feb. 28 it found internal control deficiencies related to revenue recognition and would seek an extension for filing its annual report.