AUTHENTIDATE HOLDING CORP. (OTCMKTS:ADAT) Files An 8-K Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review

AUTHENTIDATE HOLDING CORP. (OTCMKTS:ADAT) Files An 8-K Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review

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Item4.02

Non-Reliance on Previously Issued Financial
Statements or a Related Audit Report or Completed Interim
Review.

(a) On February 17, 2017, the Audit Committee of the Board of
Directors (theAudit Committee) of
Authentidate Holding Corp. (theCompany)
determined that the unaudited interim financial statements
included in the Companys Quarterly Report on Form 10-Q for the
fiscal quarter ending March31, 2016, filed on September 27, 2016,
should no longer be relied upon and that the Company will be
required to restate its previously-filed interim financial
statements for the fiscal quarter ended March 31, 2016. The Audit
Committee concluded that the unaudited interim financial
statements of the Company for the three-month and nine-month
periods ended March 31, 2016 contain material errors related to
Companys recognized revenue estimates. The Company intends to
provide amended financial results for such periods as soon as
practicable.

In recognizing revenue for its financial reports, the Company
estimates and records revenue at the time test results are
delivered, net of contractual allowances and adjustments. The
revenue estimate employed for the quarter ended March 31, 2016
was 15.25% of total billings, based in large part on historical
actuals. Beginning in calendar 2016, commercial and government
payors, who comprise the major source of collections for the
Company, focused on reducing payments to clinical laboratories by
imposing more stringent payment guidelines in their adjudication
processes. The impact of these changes was a reduction in
revenues, thereby lowering actual collections. . Additionally,
effective January 2016, the Centers for Medicare and Medicaid
Services (CMS) reduced the unit reimbursement rate for many of
the tests typically performed by the Company, along with the
number of tests that CMS would reimburse. Because Medicare and
Medicaid accounts for close to 50% of the Companys annual
revenue, this reduction in reimbursement rates had a substantial
negative impact on the Companys revenue. Management has
determined that for the quarter ended March 31, 2016, the Company
did not accurately account for these changes, resulting in the
Company overstating its revenues and accounts receivable balance.
Following managements review of these matters, the Company has
determined that its estimated collections rate for the quarter
ended March 31, 2016 should have been approximately 10.41%,
resulting in a decrease in revenues for the quarter of
approximately $2,113,000.

The following summarizes the estimated effects of the
restatement:

(1) total revenues for the third quarter of fiscal 2016 will
decrease from $7,616,000 to $5,503,000 and total revenues for
the nine-months ended March 31, 2016 will decrease from
$30,214,000 to $28,101,000;
(2) operating income for the third quarter of fiscal 2016 will
decrease from $851,000 to a loss of $1,262,000 and operating
income for the nine-months ended March 31, 2016 will be
reduced from $9,912,000 to $7,799,000; and
(3) the Companys accounts receivable balance at March 31, 2016
will be reduced from $4,549,000, net, to $2,436,000, net, and
retained earnings as of such date will decrease from
$5,416,000 to $3,303,000.

The Company will file an amendment to its Quarterly Report on
Form 10-Q for the fiscal quarter ended March31, 2016 to reflect
the restatement as soon as possible and thereafter intends to
promptly file its Annual Report on Form 10-K for the fiscal year
ended June 30, 2016 and Quarterly Reports on Form 10-Q for the
subsequent fiscal quarters of fiscal 2017.

As previously reported in the Companys Quarterly Report on Form
10-Q for the fiscal quarter ended March 31, 2016, management had
determined that material weaknesses existed in the Companys
internal control over financial reporting at March31, 2016.
Management has concluded that the errors in accounting for the
changes in the payor adjudication processes and the adjustment in
CMS reimbursement rates resulted from the material weaknesses in
the Companys internal control over financial reporting. The
Company will augment its plan to remediate the material
weaknesses in its control structure to address the factors that
resulted in the restatement. The Audit Committee and the Companys
executive management have discussed the matters described herein
with the Companys independent registered public accounting firm.

This Current Report on Form 8-K contains forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based on the
current beliefs and expectations of Authentidate Holding Corp.s
management and are subject to significant risks and
uncertainties. Actual results may differ from those set forth in
the forward-looking statements. Factors that could cause the
Companys actual results to differ materially from those described
in the forward-looking statements can be found in the Companys
Quarterly Report on Form 10-Q for the fiscal quarter ended
December 31, 2015, which was filed with the Securities and
Exchange Commission on February 22, 2016 and is available on the
Securities and Exchange Commissions website (www.sec.gov).
Authentidate Holding Corp. does not undertake to update the
forward-looking statements to reflect the impact of circumstances
or events that may arise after the date of the forward-looking
statements.



About AUTHENTIDATE HOLDING CORP. (OTCMKTS:ADAT)

Authentidate Holding Corp. and its subsidiaries provide Web-based revenue cycle management applications, and telehealth products and services. The Company enables healthcare organizations to coordinate care for patients and to manage related administrative and clinical workflows. Its Web-based solutions incorporate multiple features and security technologies, such as business-rules based electronic forms, intelligent routing, transaction management, electronic signatures, identity credentialing, content authentication, automated audit trails and remote patient management capabilities. The Company’s Inscrybe Healthcare is a Web-based revenue cycle management workflow automation solution. Its Telehealth Solutions provide an advanced in-home patient vital signs monitoring system and a Web-based management and monitoring software module for use by healthcare providers. The Company’s AuthentiProof is a content integrity and time-and-date stamp application.

AUTHENTIDATE HOLDING CORP. (OTCMKTS:ADAT) Recent Trading Information

AUTHENTIDATE HOLDING CORP. (OTCMKTS:ADAT) closed its last trading session up +0.11 at 2.46 with shares trading hands.

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