The Company currently intends to file the restated financial statements with the U.S. Securities and Exchange Commission (the “SEC”) as soon as practicable after the Audit Committee’s ongoing review is complete, the restated financial statements are complete and have been audited or reviewed by Marcum LLP (“Marcum”), the Company’s independent registered accounting firm, and the required periodic reports are finalized.
“Bill and hold” sales generally are sales meeting specified criteria under U.S. generally accepted accounting principles (“GAAP”) to recognize revenue at the time title to goods is transferred to the customer, even though the seller does not ship the goods to the customer until a later time. In typical sales transactions other than those accounted for as bill and hold, title to goods is transferred to the customer at the point of shipment or delivery. As a result of a review concerning the Subject Periods, conducted with the assistance of independent advisors, the Audit Committee identified numerous instances where bill and hold transactions did not appear to meet the requirements for revenue recognition under GAAP. As a result, the Audit Committee has concluded that, in most such cases, revenue should not have been recognized until a later time when the products were subsequently shipped to the customer. As a result, the revenue and the related cost of goods sold reported by the Company for each of the Subject Periods does not accurately reflect the revenue earned in such periods.
The restatement of the financial statements has not been completed, and the full impact of the errors on the Company’s previously filed financial statements has not yet been determined.
Due to the impact of the above matters on the presentation of the Company’s financial statements in its Form 10-K for the fiscal year ended March 31, 2023, in its Form 10-Q for the quarter ended June 30, 2023 and in its Form 10-Q for the quarter ended September 30, 2023, the Company has not timely filed its Annual Report on Form 10-K for the fiscal year ended March 31, 2023 or its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023 with the SEC, and may not timely file its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023. The Company’s ongoing negotiations with the Collateral Agent and the Purchaser also contributed to the delays in filing its Annual Report and Quarterly Report.
As part of the consideration of the above-described matters, the Company has and will continue to assess the underlying internal control deficiencies that allowed these issues to go undetected and will provide its conclusion regarding control deficiencies and remedial measures in the filings referenced in this Item 4.02.
The Audit Committee has discussed the matters described in this Item 4.02 with Marcum.
Cautionary Statement Concerning Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including the statements regarding its negotiations with its senior secured lender, the restatement and other statements regarding the Company's expectations, beliefs, plans, intentions, and strategies. The Company has tried to identify these forward-looking statements by using words such as "expect," "anticipate," "believe," "could," "should," "estimate," "intend," "may," "will," "plan," "goal" and similar terms and phrases, but such words, terms and phrases are not the exclusive means of identifying such statements. Actual results, performance and achievements could differ materially from those expressed in, or implied by, these forward-looking statements due to a variety of risks, uncertainties and other factors, including, but not limited to, the following: the Company’s ability to reach a definitive resolutions with its senior secured lender; risks related to the restatement (including discovery of additional information relevant to the financial statements subject to restatement; changes in the effects of the restatement on the Company’s financial statements or financial results and delay in the filing of the amended 10-K and amended 10-Q’s due to the Company’s efforts to complete the restatement; the time, costs and expenses associated with the restatement; potential inquiries from the SEC and/or Nasdaq; the potential material adverse effect on the price of the Company’s common stock and possible stockholder lawsuits); and expectations regarding financial performance, strategic and operational plans, and other related matters. For a detailed discussion of factors that could affect the Company's future operating results, please see the Company's filings with the Securities and Exchange Commission, including the disclosures under "Risk Factors" in those filings. Except as expressly required by the federal securities laws, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason.