Basin Water Announces Plans to Restate Prior Period Results
29 Outubro 2008 - 6:10PM
Business Wire
Basin Water, Inc. (NASDAQ:BWTR) announced today that it will
restate its financial statements for fiscal years ended December
31, 2006 and 2007, including each of the fiscal quarters in 2006
and 2007, and the fiscal quarter ended March 31, 2008 due to errors
in the accounting for certain of the Company�s transactions in 2006
and 2007. As previously reported, in connection with its review
with respect to the filing of the Company�s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2008, the Company
identified issues relating to its revenue recognition for certain
transactions, and the Audit Committee of the Company�s Board of
Directors is conducting a review of the accounting for those
transactions. As part of this investigation, the Audit Committee
retained independent legal counsel, which in turn retained
independent forensic accountants, to review the foregoing
transactions. Based on its review to date, the Audit Committee has
concluded that the Company incorrectly accounted for certain
specific transactions in 2006 and 2007. As a result, the Company
incorrectly recognized revenues relating to such transactions,
including revenues incorrectly recognized as a result of the
failure to apply Financial Accounting Standards Board
Interpretation No. 46(R) (FIN 46R). On October 29, 2008, the Audit
Committee, upon the recommendation of management, concluded that
the Company�s consolidated financial statements for the fiscal
years ended December 31, 2006 and December 31, 2007, including each
of the fiscal quarters in 2006 and 2007, and for the fiscal quarter
ended March 31, 2008 should no longer be relied upon. In reaching
this conclusion, the Company�s Audit Committee has discussed the
matters described in this press release with Singer Lewak, the
Company�s independent registered public accounting firm. As a
result of these discussions and the Audit Committee�s conclusion,
Singer Lewak has indicated that it intends to issue a letter to the
Company stating that their audit opinions on the financial
statements for the years ended December 31, 2006 and December 31,
2007 have been withdrawn and should no longer be relied upon. The
Company is in the process of preparing restated financial
statements for the fiscal years ended December 31, 2006 and
December 31, 2007, including each of the fiscal quarters in 2006
and 2007, and the fiscal quarter ended March 31, 2008. The Company
preliminarily estimates that the adjustments relating to these
errors in the fiscal years ended December 31, 2006 and 2007 and the
quarter ended March 31, 2008 will respectively (i) reduce revenues
for 2006, 2007 and the first quarter of 2008 by approximately $2.2
million, $8.7 million and $0.1 million; (ii) increase net loss for
2006 and 2007 by approximately $1.7 million and $1.5 million; and
(iii) decrease total assets, current assets and other assets as of
March 31, 2008 by approximately $3.2 million, $4.4 million and $6.4
million. However, as the Audit Committee�s review is ongoing, this
information is subject to change based upon the final findings of
the review and completion of the audit and review of the Company�s
restated financial statements by its independent registered public
accounting firm, and the effect of the adjustments could change in
such restated financial statements. The Company intends to file, as
soon as practicable, restated financial statements for the fiscal
years ended December 31, 2006 and December 31, 2007, including each
of the fiscal quarters in 2006 and 2007, and for the fiscal quarter
ended March 31, 2008. The Division of Enforcement of the Securities
and Exchange Commission is conducting an investigation with respect
to the Company�s accounting and related disclosure and other
matters. The Company intends to cooperate fully with the SEC. As of
September 30, 2008, the Company had a cash balance of approximately
$16.4 million. In recent months up through last week, the Company
has reduced its headcount by 26 to reduce costs and to eliminate
redundancies created by the Envirogen acquisition. In addition, the
Company plans to outsource its manufacturing operations to further
reduce operating costs. The Company also continues to promote its
expanded technology offering and expand its geographic presence.
About Basin Water Basin Water, Inc. is a provider of reliable,
long-term process solutions for a range of clients, which includes
designing, building and implementing systems for the treatment of
contaminated groundwater, the treatment of wastewater, waste
reduction and resource recovery. Basin Water employs treatment
technologies including its own proprietary, scalable ion-exchange
wellhead treatment system, along with a host of other treatment
technologies designed to meet customer needs in an efficient,
flexible and cost effective manner. Additional information may be
found on the company's web site: www.basinwater.com. Forward
Looking Statements This report contains forward-looking statements
made in reliance on the safe harbor provisions of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements may
be identified by their use of words, such as �estimate,� �expect,�
�intend,� �anticipate� and other words and terms of similar
meaning, in connection with any discussion of the Company�s
financial statements, business, financial condition, results of
operations or liquidity. Actual results may differ materially from
these expectations due to various risks and uncertainties,
including: the completion and results of the Audit Committee's
ongoing review of the Company's accounting practices for certain
transactions, additional accounting or other issues identified in
connection with the ongoing review, finalization of the
restatements described above and the audit and review of such
matters by the Company�s independent registered public accounting
firm, negative reactions from the Company�s stockholders, creditors
or customers to the Company�s restatement of its financial
statements, the scope and impact of any restatement of the
Company�s financial statements, the existence of other errors that
may require further adjustment of the Company�s financial
statements, the impact and result of any litigation, investigation
or other action by The Nasdaq Stock Market, the SEC, any other
governmental agency or other parties related to the Company�s
restatement of its financial statements, the effectiveness of any
cost-saving measures by the Company, the Company�s limited
operating history, significant operating losses associated with
certain of the Company�s contracts, the Company�s ability to
identify and consummate other acquisition opportunities that
improve the Company�s revenues and profitability, significant
fluctuations in its revenues from period to period, its ability to
effectively manage its growth, the success of the Company�s
strategic partners, its long sales cycles, market acceptance of its
technology, the geographic concentration of its operations and
customers, its ability to meet customer demands and compete
technologically, the Company�s ability to enter into service and
maintenance contracts with system sales, the Company�s ability to
protect its intellectual property, regulatory approvals of the
Company�s systems, changes in governmental regulation that may
affect the water industry, particularly with respect to
environmental laws, the Company�s ability to attract and retain
qualified personnel and management members, the Company�s ability
to manage its capital to meet future liquidity needs, changes in
the board of directors and management members and the timing of the
Company�s stock repurchases, if any. More detailed information
about these risks and uncertainties are contained in the Company�s
filings with the Securities and Exchange Commission, including the
company�s Annual Report on Form 10-K for the year ended December
31, 2007 and subsequent Quarterly Reports on Form 10-Q. The Company
assumes no obligation to update these forward-looking statements to
reflect any change in future events. The Company cautions readers
not to place undue reliance on any forward-looking statements,
which speak only as of the date on which they are made. The Company
does not undertake any obligation to update or revise any
forward-looking statements.
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