Search every filing
2,476,630 paragraphs from 10-Ks, 10-Qs and 8-Ks with press releases.
Matching paragraphs
Remediation Efforts to Address the Material Weakness Related to Revenue Recognition
Read in the filing ↗ Also in 10-Q of Nov 5, 2025, 10-Q of May 7, 2026
Remediation of Previously Identified Material Weakness Related to the 2027 Notes
Read in the filing ↗
As a result of management’s assessment of the Company’s annual internal control over financial reporting, management concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2024, due to one or more material weaknesses in our internal control over financial reporting generally related to a failure to design and maintain an effective control environment related to revenue recognition for its customer contracts. In relation to the material weakness in our control environment, the Company’s management is in the process of developing and implementing a remediation plan in response to the identified material weakness described above. This material weakness resulted in immaterial errors related to revenue, related contract assets and liabilities, and the remaining performance obligations disclosure as of and for each of the interim and annual periods during 2022, 2023 and 2024. More information regarding the material weakness will be contained within the Company’s Annual Report on Form 10-K to be filed for the year ended December 31, 2024.
Read in the filing ↗
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness referred to above is described in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. We considered this material weakness in determining the nature, timing, and extent of audit tests applied in our audit of the 2025 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.
Read in the filing ↗ Also in 10-K of Feb 28, 2025, 10-K of Feb 25, 2026, 10-K of Feb 28, 2025
We expect to conclude that the material weakness is remediated once we determine that the applicable controls have operated effectively for a sufficient period of time.
Read in the filing ↗ Also in 10-Q of May 7, 2026
We are committed to maintaining strong internal control over financial reporting. In relation to the material weakness, management, with oversight from the Company’s Audit Committee, is in the process of developing and implementing remediation plans in response to the identified material weakness described above. Specifically, the Company is in the process of designing and implementing control activities to ensure there is the appropriate periodic assessment of its revenue accounting policies, and that updates to the polices are made to reflect changes in product offerings or terms and conditions of the arrangements with customers. Additionally, the Company is designing and implementing additional monitoring controls for its existing and new revenue streams. This material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time for management to conclude, through testing, that such controls are operating effectively. Management is committed to the remediation of the material weakness described above, as well as the continued improvement of our internal controls and will continue to review, optimize and enhance financial reporting controls and procedures.
Read in the filing ↗ Also in 10-K of Feb 25, 2026
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. While we continually undertake steps to improve our internal control over financial reporting as our business changes, we may not be successful in making the improvements and changes necessary to be able to identify and remediate control deficiencies or material weaknesses on a timely basis. Our ability to address deficiencies may also be constrained by resource limitations, including access to skilled accounting personnel, particularly during periods of rapid growth or cost pressures. We identified a material weakness in our internal control over financial reporting
Read in the filing ↗ Also in 10-K of Feb 25, 2026, 10-Q of Aug 5, 2025, 10-Q of Nov 5, 2025
The error described above and the related Restatement were the result of an additional material weakness in the Company's internal control over financial reporting (“ICFR”) due to the lack of an effectively designed control activity to periodically
Read in the filing ↗
monitor the satisfaction of contingent conversion provisions within the Indenture governing the 2027 Notes and to assess the impact on the presentation between current and long-term liabilities. Management had previously concluded that the Company’s disclosure controls and procedures and ICFR were not effective as of December 31, 2024 due to a material weakness related to revenue recognition. “Management's Report on Internal Control over Financial Reporting” included under Item 9A of Part II of the Company's Form 10-K for the year ended December 31, 2024 will be restated to reflect the additional material weakness related to the balance sheet presentation of the 2027 Notes.
Read in the filing ↗
We disclosed in Part II, Item 9A of our amended 2024 Annual Report on Form 10-K/A that we had identified a material weakness in internal control over financial reporting related to the presentation of the 2027 Notes between current and long-term liabilities.
Read in the filing ↗
In response to the material weakness, we designed and implemented control activities to periodically monitor the satisfaction of contingent conversion provisions within the Indenture governing the 2027 Notes, as well as other relevant provisions associated with new debt arrangements entered into, to ensure they are evaluated at each balance sheet date and that any triggered provisions are appropriately assessed to ensure they are accurately accounted for and disclosed. During the second quarter of 2025, we completed the testing of these control activities and determined they have been appropriately designed and operated effectively for a sufficient period of time to conclude that the previously identified material weakness has been remediated as of June 30, 2025.
Read in the filing ↗
As disclosed in Part II, Item 9A of our 2025 Annual Report on Form 10-K, we previously identified a material weakness in our internal control over financial reporting related to revenue recognition for customer contracts. Specifically, the Company did not design and maintain controls to update its revenue recognition policies to reflect changes in product offerings or terms and conditions of arrangements with customers to ensure revenue was appropriately recognized and disclosed in accordance with GAAP. In response to this material weakness, we previously completed the design and implementation of control activities to i) periodically assess our revenue accounting policies, ii) make updates to the policies to reflect changes in product offerings or terms and conditions of the arrangements with customers, and iii) monitor and appropriately account for our existing and new revenue streams. During the second quarter of 2026, we completed the necessary testing of these control activities and determined they have been appropriately designed and implemented and have operated effectively for a sufficient period of time to conclude that the material weakness has been remediated as of June 30, 2026.
Read in the filing ↗
With respect to this material weakness, management, under the oversight of the Audit Committee, continues to execute the remediation plan as disclosed in Part II, Item 9A of our amended 2024 Annual Report on Form 10-K/A, which includes designing and implementing control activities to ensure there is the appropriate periodic assessment of its revenue accounting policies, and that updates to the polices are made to reflect changes in product offerings or terms and conditions of the arrangements with customers; and designing and implementing additional monitoring controls for its existing and new revenue streams. While we have taken steps to implement our remediation plans, the material weakness cannot be considered remediated until the necessary controls have been designed and implemented and the controls have operated for a sufficient period of time and management has concluded, through testing, that the controls are operating effectively.
Read in the filing ↗ Also in 10-Q of Nov 5, 2025, 10-Q of May 7, 2026
Notwithstanding the material weakness, and based on the additional analyses and other procedures management performed to ensure that its consolidated financial statements included in this Annual Report on Form 10-K were prepared in accordance with U.S. GAAP, we have concluded that the consolidated financial statements fairly present in all material respects our financial condition, results of operations, and cash flows for the periods presented in conformity with accounting principles generally accepted in the U.S.
Read in the filing ↗ Also in 10-K of Feb 28, 2025
as of December 31, 2024 related to a failure to design and maintain effective controls related to revenue recognition for our customer contracts. Specifically, we did not design and maintain controls to update our revenue recognition policies to reflect changes in product offerings or terms and conditions of arrangements with customers to ensure revenue was appropriately recognized and disclosed in accordance with U.S. GAAP. We are working to remediate the material weakness as further discussed in Item 9A of this Annual Report on Form 10-K. If we cannot successfully remediate identified control deficiencies, including any current or future material weaknesses in our internal control over financial reporting: the accuracy and timing of our financial reporting may be adversely affected; our liquidity, access to capital markets and perceptions of our creditworthiness may be adversely affected; we could face difficulty forecasting our financial results accurately, impacting decision-making by investors and analysts; we may be unable to maintain compliance with securities laws, stock exchange listing requirements and debt instruments’ covenants regarding the timely filing of periodic reports; we may be subject to regulatory investigations and penalties; investors may lose confidence in our financial reporting; we may suffer defaults under our debt instruments; and our common stock price may decline.
Read in the filing ↗
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2025 based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management concluded that the Company's internal control over financial reporting was not effective as of December 31, 2025 as a result of the material weakness described below.
Read in the filing ↗ Also in 10-K of Feb 28, 2025
The principal considerations for our determination that performing procedures relating to revenue recognition for certain contracts with customers for products and services is a critical audit matter are (i) the significant judgment by management when determining the revenue recognition for certain contracts with customers and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s determination of the contract term, including the existence of substantive termination penalties, determining the transaction price and identifying the performance obligations. As described in the “Opinions on the Financial Statements and Internal Control over Financial Reporting” section, a material weakness was identified related to this matter.
Read in the filing ↗ Also in 10-K of Feb 28, 2025
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because a material weakness in internal control over financial reporting existed as of that date as the Company did not design and maintain effective controls related to revenue recognition for its customer contracts.
Read in the filing ↗ Also in 10-K of Feb 25, 2026
During the years ended December 31, 2022 and 2021 and the subsequent interim period through February 26, 2024, there were no: (1) “disagreements,” within the meaning of Item 304(a)(1)(iv) of Regulation S-K, between the Company and Grant Thornton on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements, if not resolved to Grant Thornton’s satisfaction, would have caused Grant Thornton to make reference to the subject matter of the disagreement in connection with its reports on the Company’s consolidated financial statements for such years, or (2) “reportable events,” within the meaning of Item 304(a)(1)(v) of Regulation S-K, except for the material weakness in the Company’s internal control over financial reporting stemming from control deficiencies with respect to the risks of understatement of software and services revenue and overstatement of deferred revenue.
Read in the filing ↗
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Read in the filing ↗ Also in 10-K of Feb 28, 2025
Our Chief Executive Officer and Chief Financial Officer are responsible for the evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2025, the end of the period covered by this Annual Report on Form 10-K. Our disclosure controls and procedures are designed to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act, as amended, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were not effective as of December 31, 2025, as a result of the material weakness in internal control over financial reporting discussed below.
Read in the filing ↗ Also in 10-K of Feb 28, 2025, 10-Q of May 7, 2026, 10-Q of Aug 5, 2025, 10-Q of Nov 5, 2025
… impairment of our investments, including our strategic investments; our ability to attract and retain key personnel; litigation or inquiries and related time and costs; our ability to remediate the material weaknesses in our internal controls; and counterparty risks relating to cash balances held in excess of federally insured limits. Many events beyond our control may determine whether results we anticipate …
Read in the filing ↗
… impairment of our investments, including our strategic investments; our ability to attract and retain key personnel; litigation or inquiries and related time and costs; our ability to remediate the material weakness in our internal controls; and counterparty risks relating to cash balances held in excess of federally insured limits. Many events beyond our control may determine whether results we anticipate …
Read in the filing ↗ Also in 8-K of Nov 4, 2025, 8-K of Feb 24, 2026, 8-K of May 6, 2026, 8-K of Feb 25, 2025
… investments, including Axon’s strategic investments; Axon’s ability to attract and retain key personnel; litigation or inquiries and related time and costs; Axon’s ability to remediate the material weakness in Axon’s internal controls; and counter-party risks relating to cash balances held in excess of federally insured limits. Many events beyond Axon’s control may determine whether …
Read in the filing ↗ Also in 8-K of Sep 21, 2026