Read the 8K -- Revenue primarily is derived from the sale of software. That failed to comply with SOP 97-2, which requires software revenue to be recognized only after training and installation is complete. They noted:
"We also sell systems to independent distributors, and have recognized revenue upon shipment of systems to those distributors that we believed were independently capable of performing required installation and training"
As a result of the investigation to date, we have determined that there are other irregularities that resulted in improper revenue recognition and that there are other instances where revenue recognition occurred prior to the completion of all our obligations to customers. In addition, the investigation has identified facts not previously reported to our accounting department that have led to a determination that distributors were not independently capable of installing systems and/or clinically training end users at the time we recognized revenue on systems purchased by distributors. Therefore, revenue on such systems should have been deferred until installation and training had occurred at the distributor's end us
Our review is ongoing so we are not yet able to estimate the extent and timing of adjustments that will be required to our financial statements for the Prior Periods or the 2007 Period. The ultimate findings of our ongoing review and investigation and the impact of these matters on our results of operations and financial condition as previously reported are not yet known. We are also reviewing the restatement's effect on our internal control over financial reporting and our disclosure controls and procedures.
Who said just one misstatement? Here's the press release....BTW ever seen just one cockroach?
Nov 10 (Reuters) - Hansen Medical Inc's (HNSN.O) audit committee said the financial results for the year ended Dec. 31, 2007 should not be relied upon due to errors regarding revenue recognition on the sale of one of its Sensei Robotic Catheter Systems to a distributor.
In a regulatory filing with the U.S. Securities and Exchange Commission Tuesday, the medical robotics company also said it has not been paid for one of its systems, which was reported as recognized revenue in the quarter ended June 30, 2009.
In October, company said it planned to restate results for year ended Dec. 31, 2008, for March, June and September quarters of 2008, March and June quarters of 2009, which sought to correct errors regarding the timing of revenue recognition on sale of some of its systems. [ID:nBNG503075]