"Management estimates that $188,500,000 ($230,000,000 before the proportionate allocation of the excess of assets acquired over the purchase price) of the purchase price represents in-process technology that has not yet reached technological feasibility and has no alternative future use."
"I can see where the SEC may not interpret as FORE's CPA did. This R&D generated a completed product that was ready for shipment during May 1998 yet FORE wrote off the R&D expenditures..."
Frankly, I suspect that the company may have been just a tad too aggressive. Even before the acquisition, there were trade shows and trade mags that featured it and the timing of the first shipments under the auspices of FORE is just too darned close to maintain with a straight face that it had not reached technological feasibility. The filing, part of which you reproduced, is couched in the terms of the FASB regulations. Personally, I think that the SEC has a good shot at nailing them on this.
Don't get me wrong: I am long FORE, but investors should be aware that this is not a trifle and it is not necessarily of the same ilk as the in-process R&D issues for many other companies. |
