Aphton Reports on Financial Matters.Business Editors/Health/Medical Writers BIOWIRE2K MIAMI--(BUSINESS WIRE)--Feb. 24, 2004 Aphton Corporation (Nasdaq:APHT APHT Advance Physical Test ) today reported that it would reclassify Verb 1. reclassify - classify anew, change the previous classification; "The zoologists had to reclassify the mollusks after they found new species" class, classify, sort out, assort, sort, separate - arrange or order by classes or categories; "How would you certain items on its balance sheet to reflect a recalculation re·cal·cu·late tr.v. re·cal·cu·lat·ed, re·cal·cu·lat·ing, re·cal·cu·lates To calculate again, especially in order to eliminate errors or to incorporate additional factors or data. of the value of the 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 ) attributable to the Company's issuance of $20.0 million convertible debentures. This reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. is a non-cash event and has no impact on the amount owed to the holders of the convertible notes or the due date of the notes. It has no impact on the Company's cash position or burn rate. The Company previously recorded a discount to the convertible notes, and a corresponding entry to net shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. , in accordance with the Emerging Issues Task Force (EITF EITF Emerging Issues Task Force EITF Edinburgh International Television Festival EITF Europe International Taekwon-Do Federation ) No. 98-5, "Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios." The beneficial conversion feature represents the nondetachable conversion feature that is in-the-money at the commitment date, and is valued by allocating a portion of the proceeds equal to the intrinsic value Intrinsic Value 1. The value of a company or an asset based on an underlying perception of the value. 2. For call options, this is the difference between the underlying stock's price and the strike price. of that feature to additional paid-in capital additional paid-in capital Stockholder contributions that are in excess of a stock's stated or par value. For example, if a firm issues stock with a par value of $1 per share but sells the stock to investors at $10 per share, the firm's financial statements . The amount of the recalculation is being finalized. However the Company expects that as of December 31, 2003, the value of the discount assigned to the convertible debenture will decrease by an amount of approximately $3.8 million to $4.2 million. Assuming a decrease of $4 million, the value of the discount would change from $16 million, as previously reported, to $12 million, and consequently the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the convertible debentures reflected on the Company's balance sheet would be equally adjusted up from $7 million, as previously reported, to $11 million. After the Company has made corresponding adjustments, as of December 31, 2003, Total Stockholders Equity would be $0. Under these assumptions, amortization expense related to the discount, and correspondingly the Company's net loss for the year ended December 31, 2003 would be reduced by $2 million as compared to amounts previously reported by the Company. In connection with these adjustments, the Company will file promptly amended Quarterly Reports on Form 10-Q for the quarters ended June 30, 2003 and September 30, 2003. For more information regarding the convertible notes, investors are referred to the Company's amended Quarterly Reports on Form 10-Q for the quarters ended June 30, 2003 and September 30, 2003. Aphton Corporation is a biopharmaceutical company developing products using its innovative targeted immunotherapy technology for neutralizing hormones that participate in gastrointestinal system and reproductive system cancer and non-cancer diseases. Aphton has strategic alliances with Aventis Pasteur for treating gastrointestinal system and other cancers with G17DT in North America and Europe; GlaxoSmithKline for reproductive system cancer and non-cancer diseases worldwide. This news release contains forward-looking statements including (i) the Company's intent to reclassify certain items in its financial statements for the periods ended June 30, 2003 and September 30, 2003 in amended Form 10-Qs; and (ii) the amount, details and impact of the reclassification. A number of risks and uncertainties could cause actual events to differ from the Company's expectations indicated by these forward-looking statements. These risks include that the reclassification is subject to year-end adjustments and other risks addressed in the Company's filings with the Securities and Exchange Commission, including but not limited to the Company's Form S-3 filed on December 24, 2003. |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion