(Exact name of registrant as specified in its charter)
iBritish Virgin Islands
Not applicable
State or Other Jurisdiction of
Incorporation
or Organization
I.R.S. Employer Identification No.
iBuilding B15 and 25
iCoyol
Free Zone
iAlajuela
iCosta Rica
Not applicable
Address
of Principal Executive Offices
Zip Code
Registrant’s telephone number, including area code: +506 2434 2400
_____________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
iCommon
Shares, No Par Value
iESTA
The iNASDAQ Capital Market
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐iNo☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐iNo☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. iYes☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). iYes☒ No ☐
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,”“accelerated filer,”“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
iAccelerated
filer
☒
Non-accelerated filer
☐
Smaller reporting company
i☒
Emerging
growth company
i☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided, pursuant to Section 13(a) of the Exchange Act. i☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes i☐ No ☒
The aggregate market value of the common stock held by non-affiliates of the registrant on June 28, 2019 was approximately $i299,678,686.
Shares of the registrant’s common stock held by each executive officer, director and holder of 5% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purpose. The registrant has no non-voting equity.
This Form 10-K/A (Amendment No. 1) is being filed by Establishment Labs Holdings Inc. (the “Company”) to amend the Company’s Form 10-K (“Initial 10-K”) for the year ended December 31, 2019 filed with the Securities and Exchange Commission (the “SEC”) on
March 16, 2020 (the “Original Filing”) as a result of comments received from the SEC in connection with its review of the Company’s periodic reports. This Form 10-K/A (Amendment No. 1) is being filed to amend the Original Filing by supplementing certain disclosures in Item 9A “Controls and Procedures – Disclosure Controls and Procedures.”
Other than as set forth in amended Item 9A, this Form 10−K/A (Amendment No. 1) does not reflect events occurring after the filing of the Original Filing, and no other information in the Original Filings is amended hereby. Other events or circumstances occurring after the date of the Original Filing or other disclosures necessary to reflect subsequent events have not been updated subsequent to the
date of the Original Filing. Accordingly, this Form 10−K/A (Amendment No. 1) should be read in conjunction with the Original Filing and our filings with the SEC subsequent to the Original Filing.
As of December 31, 2019, the end of the period covered by this Annual Report on Form 10-K, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report. Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms and (ii) accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this annual report at the reasonable assurance level.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f)
of the Exchange Act. Our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2019 using the criteria established in “Internal Control—Integrated Framework” (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). 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 Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Based on that assessment, our management has concluded that the Company did not maintain effective internal control over financial reporting
as of December 31, 2019 because the material weakness in internal control over financial reporting discussed below continues to exist as of December 31, 2019.
Material Weakness in Internal Control over Financial Reporting
We disclosed in our Annual Report on Form 10-K for the year ended December 31, 2018, that the following material weakness in our internal control over financial reporting existed as of December 31, 2018: a lack of adequate review over the manual consolidation process, resulting in an audit adjustment, or the Material Weakness.
Changes in Internal Control over Financial Reporting
Other
than with respect to the remediation efforts discussed below, there was no change in our internal control over financial reporting that occurred during the fourth quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
5
Remediation of Previous Material Weaknesses
We have implemented and are continuing to implement a number of measures to address the Material Weakness identified as of December 31, 2018. We improved policies and procedures and designed and documented more effective controls that addressed the relevant risks in order to remediate the previously identified
Material Weakness in addition to hiring additional personnel in our accounting department and engaging consultants with technical expertise to assist in accounting for complex transactions. We also engaged a third-party consulting firm to assist us with the implementation of SAP, which is a global information technology solution designed to address, among other items, the elements which gave rise to the Material Weakness. However, despite the progress made to our internal control environment, management determined that the Material Weakness identified as of December 31, 2018 has not been remediated as of December 31, 2019, in part due to the implementation of SAP at one of our subsidiaries. We will continue to implement additional measures to address the Material Weakness identified
as of December 31, 2019.
Limitations on Effectiveness of Controls and Procedures
Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements
due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment No. 1 to its Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
