Acceris Communications to Restate Financial Results.SAN DIEGO San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. -- Acceris Communications Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ACRS ACRS See: Accelerated cost recovery system ACRS See Accelerated Cost Recovery System (ACRS). ) today announced that it will be restating its prior financial statements to correct for an error. Management has concluded that the accounting principles as set forth in Emerging Issues Task Force Issue No. 00-27 ("EITF EITF Emerging Issues Task Force EITF Edinburgh International Television Festival EITF Europe International Taekwon-Do Federation 00-27"), regarding Beneficial Conversion Feature ("BCF BCF Billion Cubic Feet BCF Bioconcentration Factor BCF British Chess Federation BCF British Coatings Federation BCF Breast Cancer Fund BCF Bank Credit Facility BCF Bulked Continuous Filament BCF British Cycling Federation BCF Boeing Converted Freighter "), had not been properly applied in current and prior years to its convertible debentures Convertible Debenture Any type of debenture that can be converted into some other security. Notes: For example, a convertible bond can be converted into stock. issued in March 2001. The initial determination of the BCF in 2001 at the issue date was correct. However, adjustments to the number of shares and their conversion price were made under the debentures' anti-dilution provisions Anti-Dilution Provision A provision in an option or a convertible security. It protects an investor from dilution resulting from later issues of stock at a lower price than the investor originally paid. . The various anti-dilution events and their respective impacts on the number of shares and the conversion price were disclosed in the Company's previous public filings. However, the principles under EITF 00-27 also require a redetermination Noun 1. redetermination - determining again determination, finding - the act of determining the properties of something, usually by research or calculation; "the determination of molecular structures" of the BCF at each date an anti-dilution event occurred. This redetermination was not completed in prior reporting periods. Additionally, the accumulation Accumulation 1) In the context of individual investing, it is the process of contributing cash to invest in securities over a period of time in order to build a portfolio of desired value. Dividends and capital gains are also reinvested during this process. of unpaid interest costs on these same convertible debentures has been deemed to be interest paid in kind ("PIK PIK See: Payment-in-kind bond PIK See payment-in-kind security (PIK). "), such interest also contains a conversion feature which once assessed as PIK interest required the determination of a BCF. This determination was not made by the Company in its prior reportings. This matter was first raised by the Company's recently appointed independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. , BDO Seidman BDO Seidman, LLP is the United States arm of BDO International, one of the largest accounting firms outside of the Big Four. History BDO Seidman, LLP was founded as Seidman and Seidman in New York City in 1910 by Maximillian L. Seidman. , LLP LLP - Lower Layer Protocol ("BDO BDO Big Day Out (Australian music festival) BDO Banco de Oro (Philippines) BDO 1,4-Butanediol BDO British Darts Organisation BDO Block Development Officer BDO Big Dumb Object "), in the course of their review of the Company's prior public filings. After discussions among the Company's management, BDO, and the Company's prior auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together , PriceWaterhouseCoopers, LLP ("PWC"), the Company's management concluded that a correction of the prior accounting on this matter was required. The Company's management brought the matter for consideration before the Audit Committee and the full Board of Directors of the Company. Having considered the circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or underlying the accounting errors and their effects upon the Company's prior filings, and having discussed the matter with the BDO and PWC representatives as well as the Company's management, the Audit Committee concluded that the previously issued financial statements should not be relied upon and approved and authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: the Company's management to amend certain previously filed public reports. Therefore, in connection with the foregoing, the Company management will shortly (i) file its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the second fiscal quarter of 2004, and (ii) amend previously filed Annual Reports on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and Quarterly Reports on Form 10-Q for all fiscal years and quarters since the fourth quarter of 2002. The correction of these errors results in an increase in deemed interest expense and net loss, in all reporting periods from the fourth quarter of 2002 through the first quarter of 2004, and a reduction in reported liabilities and stockholders' deficit in all reporting periods from the fourth quarter of 2002 through the first quarter of 2004. The effect of these errors, by reporting period, is detailed below. The Company has filed a Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. with the Securities and Exchange Commission detailing the impact of this error and has also indicated that it expects to amend existing securities filings accordingly and to become current in its filings shortly. The Company urges investors not to rely on the financial information included in the Company's prior public reports for the affected fiscal periods filed pursuant to the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , until it restates such financial information and files the affected public reports with the U.S. Securities and Exchange Commission.
Effect of the restatements on the consolidated statements
of operations
(in thousands of dollars except per share amounts)
(per share information reported on a post 20:1 stock consolidation
basis for all periods shown. Stock consolidation enacted in the
fourth quarter of 2003)
Three months Three months Three months
------------- -------------- --------------
ended ended ended
------------- -------------- --------------
Dec. 31, 2002 March 31, 2003 June 30, 2003
------------- -------------- --------------
Net income (loss) as
currently reported
on Form 10-K or 10-Q $ (11,117) $ (14,895) $ (3,713)
Correction of EITF
00-27 errors (301) (902) (1,089)
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Net loss as expected to
be reported on revised
Form 10-K or 10-Q $ (11,418) $ (15,797) $ (4,802)
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Net income (loss) per share
as currently reported on
Form 10-K or 10-Q $ (1.92) $ (2.55) $ (0.64)
---------------------------------------------------------------------
---------------------------------------------------------------------
Net loss per share as
expected to be reported
on revised Form 10-K or
10-Q $ (1.96) $ (2.71) $ (0.82)
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---------------------------------------------------------------------
Three months Three months Three months
-------------- -------------- --------------
ended ended ended
-------------- -------------- --------------
Sept. 30, 2003 Dec. 31, 2003 March 31, 2004
-------------- -------------- --------------
Net income (loss) as
currently reported
on Form 10-K or 10-Q $ (3,257) $ (4,456) $ 594
Correction of EITF
00-27 errors (1,337) (1,779) (1,801)
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Net loss as expected to
be reported on revised
Form 10-K or 10-Q $ (4,594) $ (6,235) $ (1,207)
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Net income (loss) per share
as currently reported on
Form 10-K or 10-Q $ (0.56) $ (0.44) $ 0.03
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---------------------------------------------------------------------
Net loss per share as
expected to be reported on
revised Form 10-K or 10-Q $ (0.79) $ (0.59) $ (0.06)
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Effect of the restatements on the consolidated balance sheets
(in thousands of dollars)
As at As at As at
---------------------------------------------------------------------
Dec. 31, 2002 March 31, 2003 June 30, 2003
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Notes payable to a
related party:
As currently reported
on Form 10-K or 10-Q $ 30,058 $ 30,496 $ 30,985
Correction of EITF
00-27 errors (6,109) (5,364) (4,437)
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As expected to be reported
on revised Form 10-K
or 10-Q $ 23,949 $ 25,132 $ 26,548
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Additional paid-in capital:
As currently reported on
Form 10-K or 10-Q $ 129,553 $ 129,553 $ 129,618
Correction of EITF
00-27 errors 6,410 6,567 6,729
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As expected to be reported
on revised Form 10-K
or 10-Q $ 135,963 $ 136,120 $ 136,347
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Accumulated deficit
As currently reported on
Form 10-K or 10-Q $(194,301) $(209,196) $(212,909)
Correction of EITF
00-27 errors (301) (1,203) (2,292)
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As expected to be reported
on revised Form 10-K
or 10-Q $(194,602) $(210,399) $(215,201)
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Stockholders' equity
(deficit):
As currently reported on
Form 10-K or 10-Q $ (63,925) $ (78,820) $ (82,468)
Correction of EITF
00-27 errors 6,109 5,364 4,437
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As expected to be reported
on revised Form 10-K
or 10-Q $ (57,816) $ (73,456) $ (78,031)
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As at As at As at
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Sept. 30, 2003 Dec. 31, 2003 March 31, 2004
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Notes payable to a
related party:
As currently reported on
Form 10-K or 10-Q $ 33,483 $ 35,073 $ 41,060
Correction of EITF
00-27 errors (3,265) (6,356) (4,834)
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As expected to be reported
on revised Form 10-K
or 10-Q $ 30,218 $ 28,717 $ 36,226
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Additional paid-in capital:
As currently reported on
Form 10-K or 10-Q $ 129,618 $ 171,115 $ 171,192
Correction of EITF
00-27 errors 6,894 11,764 12,043
---------------------------------------------------------------------
As expected to be reported
on revised Form 10-K
or 10-Q $ 136,512 $ 182,879 $ 183,235
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---------------------------------------------------------------------
Accumulated deficit
As currently reported on
Form 10-K or 10-Q $(216,166) $(220,622) $(220,028)
Correction of EITF
00-27 errors (3,629) (5,408) (7,209)
---------------------------------------------------------------------
As expected to be reported
on revised Form 10-K
or 10-Q $(219,795) $(226,030) $(227,237)
---------------------------------------------------------------------
---------------------------------------------------------------------
Stockholders' equity
(deficit):
As currently reported on
Form 10-K or 10-Q $ (85,725) $ (49,309) $ (47,292)
Correction of EITF
00-27 errors 3,265 6,356 4,834
---------------------------------------------------------------------
As expected to be reported
on revised Form 10-K
or 10-Q $ (82,460) $ (42,953) $ (42,458)
---------------------------------------------------------------------
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About Acceris Acceris is a broad based communications company Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. serving residential, small and medium-sized Me´di`um-sized` a. 1. Having a medium size; as, a medium-sized man s>. Adj. 1. medium-sized - intermediate in size medium-size, moderate-size, moderate-sized business and large enterprise customers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . A facilities-based carrier, it provides a range of products including local dial tone and 1+ domestic and international long distance voice services, as well as fully managed and fully integrated data and enhanced services Enhanced service is service offered over commercial carrier transmission facilities used in interstate communications, that employs computer processing applications that act on the format, content, code, protocol, or similar aspects of the subscriber's transmitted information; . Acceris offers its communications products and services both directly and through a network of independent agents, primarily via multi-level marketing Multi-level marketing (MLM, now sometimes called network marketing) is a business model that combines direct marketing with franchising. Multi-level marketing businesses function by recruiting salespeople (also called Distributors, Independent Business and commercial agent programs. Acceris also offers a proven network convergence solution for voice and data in Voice over Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. ("VoIP") communications technology Noun 1. communications technology - the activity of designing and constructing and maintaining communication systems engineering, technology - the practical application of science to commerce or industry and holds two foundational patents in the VoIP space. For further information, please visit Acceris' website at www.acceris.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This release contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, as amended, that are based on management's exercise of business judgment as well as assumptions made by and information currently available to management. When used in this document, the words "may", "will", "anticipate", "believe", "estimate", "expect", "intend" and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements reflect our current view of future events and are subject to certain risks and uncertainties as noted in our securities and other regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. filings. Should one or more of these risks or uncertainties materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , or should underlying assumptions prove incorrect, our actual results could differ materially from those anticipated in these forward-looking statements. We undertake no obligation and do not intend to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" or to reflect the occurrence of any unanticipated events. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize. Many factors could cause actual results to differ materially from our forward-looking statements. |
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