Dr. Aslami: "This accounting treatment does not affect the net equity, the future operations, and the cash position of the company."
"The accounting treatment provides for an increase of $5.3 million to paid-in capital that is offset by an increase to interest expense. The charge to interest expense flows through net income. The adjustment arose during the preparation of the company's second quarter report to the SEC in connection with the $6 million convertible note that was issued to Crescent International as part of their $30 million equity line commitment that closed on June 9, 2000.
"The $6 million was used to partially fund the acquisition of Xtal in Brazil. Under the terms of the June 9th agreement, the company could issue up to $7.5 million in convertible notes. On July 5, 2000, the Company issued another convertible note for the remaining $1.5 million. The $1.5 million convertible note issuance gave rise to an $88 thousand accounting adjustment that will be reflected in the company's third quarter results.
"This accounting treatment does not affect the net equity, the future operations, and the cash position of the company. As for the business itself, we are operating in a strong fiber market, and the expectation that the company will report income from operations for the year remains unchanged," said Dr. Mohd Aslami, President and CEO of FiberCore, Inc.""
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