Looks like the accountants blindsided MXWL Monday morning and the Shorts Just keep shorting
as people are selling also.. 3 people fired/resigned, Sales manager, VP, and another, all for trying to ????
I'll guess hitting the Goal was their revenue goal, even if it meant SYONARA.
With the sales numbers all added correctly/per quarter, the stock should not be. $6
Spoke to Mr. Schramm, excellent communication.
The Company believes that the impact to the Prior Periods of correcting the errors in revenue recognition related to sales transactions to these distributors will be to decrease previously reported revenues and profits for 2011 and the first three quarters of 2012, and to increase revenue and profits by the same amounts in subsequent periods.
The Company believes that the restatement of revenue related to these distributors will decrease previously reported revenues for fiscal year 2011 by approximately $6.5 million and decrease revenues in the first three quarters of 2012 by approximately $5.5 million in the aggregate.
The Company also believes that the restatement of revenue related to these distributors will result in shipments to these distributors for which title has passed to the distributor, but for which the revenue recognition criteria has not been fully achieved, of approximately $12.0 million as of September 30, 2012. Of the shipments to these distributors that had not been collected as of September 30, 2012, and therefore not recognized as revenue, the Company collected $4.6 million in the fourth quarter of 2012 and $3.0 million to date in the first quarter of 2013, leaving $4.4 million outstanding that will be recognized as revenue as the Company receives payments in the future.
The Company has also determined that two of the distributors described above were granted general rights of return until the product is sold to an end-user. These rights of return will result in a further decrease to previously reported revenue for 2011 and the first three quarters of 2012. These decreases in previously reported revenue will result in a corresponding increase as of September 30, 2012, in shipments to these distributors for which title has passed to the distributor, but for which the revenue recognition criteria have not been fully achieved.
The Company is in the process of evaluating deficiencies in its internal controls over financial reporting and has preliminarily concluded that it has material weaknesses in its internal controls over financial reporting related to the identification and evaluation of revenue transactions which deviate from contractually established payment terms and therefore has preliminarily concluded that its internal controls over financial reporting and disclosure are not effective. The Company intends to design and implement controls to remediate these deficiencies.
As a result of the investigation, certain employees were terminated and the Company's Sr. Vice President of Sales and Marketing resigned.
The Company, including the audit committee, had discussed the foregoing matters with its former independent registered public accounting firm, McGladrey LLP. The audit committee has authorized and directed the officers of the Company to take the appropriate and necessary actions to restate its financial statements for the Prior Periods. The Company intends to file restated financial statements for the Prior Periods as soon as reasonably practicable.