Interpretation: We finally have a solid financial executive in place at ACTC who knows what needs to be done and is fixing the historical financial statements as a necessary requisite to any planned ACTC up listing to the NASDAQ. The restatement has no impact whatsoever on the PPS, Cash Flow, or financial condition of the Company as the events are past and have been already been factored into the value of ACTC. Investors should not be running to sell ACTC shares on this new filing but rather should be buying as the Company will be taking off once it announces its trial results in a matter of days.
Sentiment: Strong Buy
Myles probably had some small idea of what was required here but in experience the outside CPA is who drove these updated reporting requirements.
My feeling is that it could be connected to the 3 year audited F/S for NASDAQ uplisting. But the uplisting is all speculation on my part. The 3year audit requirement for NASDAQ is just evidence pointing in that direction.
If BK, they would not have been entertaining the restatement as everything is stayed in BK, so why do it and go through the expense.
Own DD as this is all really non-factual speculation but only educated guesses without being on the inside or having company disclosure.
A good way to say dilution-what dilution? A/G must be spitting mad.
The accounting guidance now being applied relates to full ratchet anti-dilution protection that was provided in connection with the issuance of two separate warrant agreements in September 2005. These warrants contained an anti-dilution feature which entitled the holders to automatic adjustments in the number and purchase price of their shares, if the Company issued lower-priced shares between May 1, 2005 and January 15, 2009. Management has determined that the anti-dilution feature should have been recorded at fair value as a derivative liability upon exercise of the warrants and as an unsettled liability from the end of the life of the anti-dilution feature until settlement. This treatment would require mark-to-market adjustments at each reporting date until the anti-dilution feature was settled. Due to the resulting financial statement impact from January 15, 2009, the date on which the anti-dilution feature expired, onward, the Company has determined to restate its financial statements for the Applicable Periods. In connection with the audit of its financial statements for fiscal year 2013, management is also evaluating the application of ASC 450, Contingencies, for the year ended December 31, 2013, as it relates to the ongoing, previously disclosed, legal dispute between the Company and the warrant holders. The restated financial statements that are being prepared apply Accounting Standards Codification (ASC) 815, Derivatives and Hedging, to all periods from January 15, 2009 through the third quarter of 2013, in addition to the application of ASC 450 for the three and nine months ended September 30, 2013.
Agree-this is a good thing. Non-cash impact and already known issues were historically there because they were awaiting court interpretation.
Realistically, internal accountant and external CPA should have caught this before court anyway but who cares now. Non-cash presentation issue will be resolved soon.