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Technology Stocks : Net Perceptions, Inc. (NETP) -- Ignore unavailable to you. Want to Upgrade?

To: rupert1 who wrote (2546)	7/24/2000 8:12:59 PM
From: bernieb2	Respond to of 2908

Just talked with Tony and got an email from him. As he says, it's a PR nightmare, but it will be over by tomorrow I feel. Correct Pro-Forma earnings is (.15)! Here's the basics... Stock compensation expense is NOT included in the Analysts Income Pro Forma statements. In the past NETP has included it and it has had little effect on the earnings because it was so small, now it is large enough to effect the price. Based on this they have had the accountants using different numbers until they all agree it was (.15). Unfortunately not all the numbers on all the releases, etc. got changed. The earnings or (.15) pro forma are correct. Ps. for those interested, the amortization is not a cash transaction. To simply state it, when they bought KD1 they paid more than the company was worth on paper, this is called Good Will. That cost is theoretically immediately taken into account by the increase in shares without the same increase in assets. The market would theoretically immediately drop the price of the stock to compensate (baring any intrinsic increase in value due to the purchase as well). Although the "market" can take this into account immediately, the accountants are required to actually take this into account on their books. So that is what the amortization is for... Finally, the lease termination reserve IS .03 cents a shares ($800,000), this is for the possibility they do not sublet the space they currently have, and must pay the additional expenses for the lease. It must be taken in Q2 because that is when they realized the expense (using accrual accounting methods). They don't anticipate the expense to be more than that amount, but certainly could be less if they sublet the space. Which is their intentions. I didn't take time to fully reread this, but I'm sure the numbers are right! hahah.. let me know if you have any questions...