Annette... I think it sort of means Ooops ....
"Based on the Company's stock price on May 1, 1998, the date of issuance of the convertible
preferred stock, these securities are deemed to have contained beneficial conversion features that
must be recognized as a dividend paid to preferred stockholders. After the end of the quarter ended
December 31, 1998 the Company determined its financial statements for the quarters ended June
30 and September 30, 1998 should be restated to reflect the allocation of proceeds to the
beneficial conversion features of the Company's convertible preferred stock and accompanying
warrants. Revenues, expenses, net loss, total assets and total shareholders' equity are not affected
by this restatement. The Company is conforming its financial statements with the Financial
Accounting Standards Board's Emerging Issues Task Force - Topic D60 (''Accounting for the
Issuance of Convertible Preferred Stock and Debt Securities with a Nondetachable Conversion
Feature'') issued March 13, 1997, and considering the Task Force's Working Group discussions
and tentative conclusions reported on Issue 98-5, November, 1998, which provide that any
discounts resulting from an allocation of proceeds to the beneficial conversion feature is analogous
to a dividend, and should be recognized as a return to the preferred stockholders over the minimum
conversion period (from date securities are issued to date they are first convertible). As a result of
this restatement, basic and diluted loss applicable to common shareholders for the three months
ended June 30, 1998 increased by $4.89 per share and for the six months ended September 30,
1998 by $3.79 per share. The Company intends to amend its Forms 10-Q for the quarters ended
June 30 and September 30, 1998 to reflect this restatement."
I'm still trying to digest this ... Any thoughts?
Carol |
