Filing Analysis
Veritone, Inc. dismissed Grant Thornton LLP and appointed CBIZ CPAs P.C. as its new independent auditor effective April 23, 2026. This change occurs while the company is under a 'going concern' qualification and has disclosed five distinct material weaknesses in its internal controls over financial reporting.
Red Flags
- Consecutive 'going concern' qualifications for fiscal years 2024 and 2025.
- Five separate categories of material weaknesses in internal control over financial reporting.
- Auditor change while facing significant financial distress and internal control failures.
- Reported lack of sufficient qualified resources to perform control activities.
- Ineffective IT general controls over user access and change management.
Key Facts
- Dismissed Grant Thornton LLP as the principal accountant on April 23, 2026.
- Appointed CBIZ CPAs P.C. as the new auditor effective immediately on April 23, 2026.
- Audit reports for fiscal years ended December 31, 2024, and December 31, 2025, included explanatory paragraphs regarding substantial doubt about the company's ability to continue as a going concern.
- Identified material weaknesses in internal controls including entity-level controls, consolidation/foreign exchange translation, IT general controls (ITGCs), information and communication processes, and revenue recognition.
- The material weakness regarding revenue recognition for non-routine transactions was specifically added in the FY 2025 report.
Veritone, Inc. is restating its financial statements for the third quarter of 2025 due to multiple accounting errors, primarily involving revenue recognition and non-monetary transactions. The restatement results in an 8.5% reduction in Q3 2025 revenue and an increase in net loss, alongside the identification of a new material weakness in internal controls.
Red Flags
- Revenue recognition errors (ASC 606), which are high-scrutiny areas for regulators.
- Identification of a new material weakness in internal controls adding to existing weaknesses.
- Significant overstatement of revenue (8% of Q3 total) involving non-monetary/barter consideration.
- Clerical billing errors and misclassification of 'agent' vs 'principal' revenue transactions.
Key Facts
- Management and the Audit Committee determined that Q3 2025 financial statements should no longer be relied upon as of April 8, 2026.
- Q3 2025 revenue was overstated by $2.49 million, decreasing from $29.1 million to $26.6 million (an 8.5% drop).
- Net loss for Q3 2025 increased by $2.36 million, from $26.88 million to $29.24 million.
- A major error involved a $2.2 million overstatement of revenue from an on-premise software sale exchanged for a non-monetary asset.
- The company identified a new material weakness in internal control over financial reporting related to revenue recognition for non-routine transactions.
- Immaterial errors from Q2 2025 will also be revised in the upcoming 10-Q/A filing.
Veritone, Inc. announced preliminary, unaudited financial results for the fourth quarter and the full fiscal year ended December 31, 2025, via a press release on March 26, 2026.
Key Facts
- Preliminary, unaudited financial results for Q4 and FY ended Dec 31, 2025
- Press release issued on March 26, 2026, and included as Exhibit 99.1
- Reported under Item 2.02 (Results of Operations and Financial Condition)
- The filing was signed by CFO Michael L. Zemetra