On December 8, 2006 American Technology Corporation (the "Company") announced that it is conducting a voluntary review of its historical stock option and stock grants. The Audit Committee of the Company's Board of Directors, comprised of three independent board members, is leading the review.
Option grants from the fiscal years ended September 30, 1998 to September 30, 2006 are being reviewed by the Audit Committee with the assistance of outside counsel. While the review is not complete, a preliminary determination has been made that measurement dates for accounting purposes may differ from recorded dates used for certain grants made from fiscal 1998 to fiscal 2004. While the review is ongoing, the information the Company has reviewed to date does not indicate misconduct or fraud by any member of the Company's current management. The Company has not yet determined the appropriate non-cash adjustments to compensation expense or adjustments to the related tax effects of previous stock option and stock grants. However, depending on the results of the review, a material adjustment to the Company's financial statements may be required. The Company expects to incur incremental legal and accounting fees related to this review that will increase its general and administrative costs in the near term.
The Company's annual report for its fiscal year ended September 30, 2006 is due to be filed with the Securities and Exchange Commission on or before December 14, 2006. While the Audit Committee is working to complete its review as quickly as possible, the Company believes it is likely that the process will not be completed in a manner that will allow the annual report on Form 10-K to be filed by that date.
The Company issued a press release on December 8, 2006 announcing that it was conducting the review of its stock option and stock grant practices. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
No earnings to impact, so no effect there. The options' prices will likely have to be increased; so, if ever exercised, would bring more cash to the coffers.
Net, net, shouldn't have much overall impact. IMO.
Best,
Savant |
