What changed in this filing

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Item 9A. Controls and Procedures

2022-02-28 compared with 2021-02-26 · 28 added, 31 removed, 193 unchanged (23% of the section changed)

14 unchanged sentences

Given the rapid growth in the size and complexity of the business, we failed to maintain a sufficient number of professionals with an appropriate level of accounting and internal control knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately.

This material weakness contributed to additional material weaknesses, previously disclosed and remediated, as discussed below.

In aggregate, these material weaknesses resulted in the misstatement of our revenues, revenue reserves, bad debt expense, property and equipment, research and development

expense and related financial disclosures, and in the revision of the Company’s consolidated financial statements for the years ended December 31, 2017, December 31, 2018, and each interim period therein as well as the quarters ended March 31, 2019, June 30, 2019, and September 30, 2019.

This material weakness contributed to additional material weaknesses, previously disclosed and remediated.

In aggregate, these material weaknesses (including the previously remediated material weaknesses) resulted in the misstatement of our revenues, revenue reserves, bad debt expense, property and equipment, research and development expense and related financial disclosures, and in the revision of the Company’s consolidated financial statements for the years ended December 31, 2017, December 31, 2018, and each interim period therein as well as the quarters ended March 31, 2019, June 30, 2019, and September 30, 2019.

Additionally, this material weakness could result in a misstatement of account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Based on this assessment and because of this material weakness, we concluded that the Company's internal control over financial reporting was not effective as of December 31, 2020.

Because of these deficiencies, and in spite of our remediation progress, described below, we concluded that the Company's internal control over financial reporting was not effective as of December 31, 2021.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included in Part II, Item 8 of this Annual Report on Form 10-K.

Remediation Plan Activities

As it relates to the material weakness that continues to exist as of December 31, 2020, we performed the following actions:

As it relates to the material weakness that exists as of December 31, 2021, we performed the following actions:

• Increased the depth and experience of our Finance organization by increasing the number of management and staff members, expanding our technical experience in accounting, auditing and reporting matters, and performing internal controls training for management and staff members.

1 unchanged sentence

These individuals are focused on the development, maintenance and monitoring of our overall control environment and system of key internal controls over financial reporting.

We remain committed to the continued hiring and on-boarding of additional members of the organization supporting the internal control over financial reporting.

As of December 31, 2020, we have filled key positions within the Finance organization and will continue to add skilled talent as complexities grow and needs arise.

These investments in resources have significantly improved the stability of our accounting organization.

While significant progress has been made in response to the material weakness in the control environment, key remediation plan activities include additional training programs and hiring of additional resources in support of certain control activities.

• Hired several IT compliance experts including a Sr.

Director of Cybersecurity with 20+ years of experience in cybersecurity, a Healthcare IT Compliance director with 15 years’ experience in technology risk management compliance and assurance experience, and a senior IT compliance analyst with 20 years’ experience in information security, IT governance and IT asset management.

These investments in resources have significantly improved the stability of our accounting organization and our IT compliance expertise.

While significant progress has been made in response to the material weakness in the control environment, key remediation plan activities include additional training programs, automation efforts, and hiring of additional resources in support of certain control activities in the IT Compliance area.

Additionally, time is needed to demonstrate sustainability as it relates to our internal control over financial reporting and improvements made to our complement of resources, including demonstrating sustained operating effectiveness of our internal controls.

Remediation of Previously Disclosed Material Weaknesses

Additional material weaknesses were previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019 and the following elements have been remediated as of December 31, 2020:

• Material weakness related to the financial statement close process

We did not effectively execute our controls over the financial statement close process, to ensure the prevention or detection of a misstatement that could be material.

Specifically, we previously concluded we did not have an effective business performance review control used to monitor the completeness and accuracy of the financial results and to identify potential failures in lower level controls.

This control may not have detected errors in a timely manner that could be material to our interim or annual financial statements.

Additionally, we did not have appropriate control over the review of journal entries to ensure that they were properly supported and recorded completely and accurately.

• Material weakness related to the accounting for revenue and related accounts receivables and reserves

We did not maintain effective controls with respect to the review of the accounting for revenue and related accounts receivable, including maintaining effective controls to prevent or detect errors in the assessment of bad debt and revenue reserves.

Specifically, we did not detect errors within the contractual allowance and bad debt expense analyses which resulted in immaterial misstatements to revenue, accounts receivable and bad debt expense.

During the year ended December 31, 2020, we completed the testing and evaluation of the operating effectiveness of the newly designed and implemented and enhanced controls and concluded these material weaknesses have been remediated as of December 31, 2020.

Changes in Internal Control Over Financial Reporting

There have been no changes in internal control over financial reporting during the quarter ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes in internal control over financial reporting during the quarter ended December 31, 2021, other than as described above, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

4 unchanged sentences

Other Information.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Directors, Executive Officers and Corporate Governance.

7 unchanged sentences

Principal Accounting Fees and Services.

Our independent registered public accounting firm is PricewaterhouseCoopers LLP , San Jose, CA , PCAOB ID:

The information required by this item is incorporated by reference from our definitive Proxy Statement to be filed with the SEC in connection with our 2022 Annual Meeting of Stockholders within 120 days after the end of the fiscal year ended December 31, 2021.

114 unchanged sentences

8-K 001-37918 10.41 August 21, 2020

10.42 Multi-Tenant Office/Industrial Lease by and between iRhythm Technologies, Inc.

and Katella/Holder Street LLC dated March 18, 2021.

10-Q 001-37918 10.42 May 5, 2021

10.43± First amendment to development collaboration agreement by and among Verily Life Sciences LLC, Verily Ireland Limited, and iRhythm Technologies, Inc.

10-K 001-37918 10.43 February 25, 2022

10.44± Second amendment to development collaboration agreement by and among Verily Life Sciences LLC, Verily Ireland Limited, and iRhythm Technologies, Inc.

10-K 001-37918 10.44 February 25, 2022

21.1 List of Subsidiaries of Registrant.

16 unchanged sentences

± Confidential treatment has been requested for portions of this exhibit.

These portions have been omitted and have been filed separately with the Securities and Exchange Commission.

These portions have been omitted and have been filed

separately with the Securities and Exchange Commission.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

iRhythm Technologies, Inc.

February 28, 2022 By:

/s/ Michael Coyle

Michael Coyle

/s/ Quentin S.

President and Chief Executive Officer

2 unchanged sentences

Name Title Date

/s/ Michael Coyle President, Chief Executive Officer and Director

/s/ Quentin S.

Blackford President, Chief Executive Officer and Director

(Principal Executive Officer)

February 28, 2022

Michael Coyle

/s/ Douglas J.

Devine Chief Financial Officer

(Principal Financial Officer)

February 26, 2021

Devine Chief Financial Officer and Chief Operating Officer

(Principal Financial Officer) February 28, 2022

Bodaken Director February 28, 2022

6 unchanged sentences

Rubash Director February 28, 2022

/s/ Raymond W.

Scott Director February 26, 2021

/s/ Karen Ling Director February 28, 2022

/s/ Renee Budig Director February 28, 2022

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures