HeadSpin board chairman Nikesh Arora. Photo credit: Nadine Rupp/Getty Images, under Creative Commons license

Not too long ago, HeadSpin, a mobile app testing startup, secured $60 million in Series C funding that boosted the amount of funding the company had raised since its inception to $117 million and valued it at roughly $1.2 billion. Investors in that round included the likes of Dell Technologies Capital, Tiger Global, Alpha Square Group, and prominent individual investors such as LinkedIn’s Jeff Weiner and Facebook executive Kevin Weil. Right now, however, things seem to be rocky at HeadSpin, with the company now required to return up to $95 million in funding to investors after an internal review shed light on financial irregularities and forced it to restate its financials, as first reported [paywall] by The Information.

According to The Information, an internal review at HeadSpin led by Nikesh Arora, the company’s recently appointed board chair, revealed that the company was on track to post $15 million in annual recurring revenue (ARR) by this year’s end, much lesser than a previous $100 million ARR forecast that it provided to investors in February. Due to misstating its financials, the company has now agreed to return up to $95 million in funding to investors, as reported by The Information. HeadSpin is also said to have internally slashed its valuation from $1.2 billion to $250 million, as implied by a newly set share price. The company confirmed its recapitalization to The Information but said it hadn’t firmly established a new valuation.

As of February of this year when it secured Series C funding, HeadSpin claimed it had doubled its annual revenues year-over-year and boasted of having more than 1,000 enterprise customers. Given the reported situation, it’s unclear if that stands true. HeadSpin is based out of Palo Alto but also has global offices in London; Tel Aviv, Israel; Berlin, Germany; and Cape Town, South Africa. The company primarily develops software tools used by developers to test mobile apps before deployment.