RTI Surgical Holdings To Restate Its Previously Issued Audited Financial Statements For The Years Ended December 31, 2014, 2015, 2016, 2017 and 2018, In Addition To Its Unaudited Financial Statements For The Quarterly Periods For 2016-2018 And The Nine Months Ended September 30, 2019
Kehoe Law Firm, P.C. is making investors aware that on April 9, 2020, RTI Surgical Holdings, Inc. (“RTI Surgical” or the “Company”) (NASDAQ: RTIX) announced that it is still “. . . conducting an internal investigation of matters relating to the Company’s revenue recognition practices for certain contractual arrangements, primarily with OEM customers, including the accounting treatment, financial reporting and internal controls related to such arrangements . . ..” RTI Surgical stated that its internal investigation “. . . was precipitated by an ongoing investigation by the Securities and Exchange Commission . . . initially related to the periods 2014 through 2016. The investigation, according to RTI Surgical, “. . . is ongoing, and the Company is cooperating with the SEC in its investigation.” [Emphasis added.]
RTI Surgical also announced that
[o]n April 7, 2020, the Audit Committee of the Board of Directors concluded that the Company will restate its previously issued audited financial statements for the years ended December 31, 2014, 2015, 2016, 2017 and 2018 and its unaudited financial statements for the quarterly periods for 2016-2018 and the nine months ended September 30, 2019 (the “Relevant Periods”). Accordingly, investors should no longer rely upon the Company’s previously released financial statements as of and for the years ended December 31, 2018, 2017, 2016, 2015, and 2014, and the reports on the financial statements and internal control over financial reporting of the Company’s independent registered public accounting firm thereon; or the quarterly financial statements and other financial data released related to the Relevant Periods.
The Company has concluded that revenue for certain invoices should have been recognized at a later date than when originally recognized. In response to binding purchase orders from certain OEM customers, goods were shipped and received by the customers before requested delivery dates and agreed-upon delivery windows. In many instances, the OEM customers requested or approved the early shipments, but the Company has determined that on other occasions the goods were delivered early without obtaining the customers’ affirmative approval. In addition, the Company has concluded that in July 2017, an adjustment was improperly made to a product return provision in the Direct Division. Accordingly, the Company will revise its financial statements to correct these errors and any others as it finalizes the [i]nvestigation. The Company and the Audit Committee of the Board of Directors have discussed these matters with Deloitte & Touche LLP, the Company’s independent registered public accounting firm. [Emphasis added.]
Class Action Lawsuit Filed Against RTI Surgical Holdings, Inc. On Behalf of Investors Who Purchased Shares of RTIX Stock Between March 7, 2016 and March 16, 2020
According to the lawsuit, RTI Surgical throughout the Class Period between March 7, 2016 and March 16, 2020, both dates inclusive, made false and/or misleading statements and/or failed to disclose that: (1) the Company inappropriately recognized revenues with respect to certain contractual arrangements, including other equipment manufacturer customers; (2) RTI Surgical’s internal controls over financial reporting were not effective; (3) as a result, RTI Surgical would be forced to delay the filing of its Form 10-K for fiscal year ended December 31, 2019; and (4) as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.
RTI Surgical investors who purchased, or otherwise acquired, RTIX securities during the Class Period and suffered losses are encouraged to contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], or John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], to discuss the class action lawsuit or potential legal claims.