Based on the evidence and professional advice available to it, the Committee concluded that the Company should restate certain of its historical financial statements with respect to its reporting of certain transactions with Afinsa, and recommended that the Company consider and determine the scope of such restatement
The net result of the restatement
of the Company's interim statements for the quarter ended June 30, 2006 is the recording of a non-cash charge of $78,000 to interest expense resulting in an increase in the net loss of $78,000, an increase in the basic and diluted loss per share of $(0.
These risks and uncertainties include, but are not limited to, our ability to timely complete the restatement
of our financial results and our delinquent SEC reports, and the fact that our historical financial results are not finalized and are subject to change.
As a result of the stock option review and resulting restatement
, the company's management has concluded the following:
While this restatement
is necessary to comply with generally accepted accounting principles, it will also improve Tri-S Security's income statement moving forward by reducing the non-cash interest expense related to the 10% convertible promissory notes," said Ronald Farrell, Chairman and CEO of Tri-S Security.
The Company is working diligently to complete the restatements
and expects to file amended disclosure documents in the near future.
characteristics have received some research attention.
According to the study, restatements
grew from 90 in 1997 to I,5777 in 2006, accelerating by 380 percent in 200I, the year before Sarbanes-Oxley was enacted.
8 percent, restatement
announcements identified grew about 67 percent over this period.
Revenue "mis-recognition" is the leading cause of restatement
, and the rate of restatements
has been soaring.
Despite such difficulty, certain general principles have evolved in numerous cases applying the restatement
The largest financial restatement
for each of the last three years was disclosed by a foreign registrant.
Should Be Eyed Suspiciously," read the headline of an item by Bruce Meyerson, national business writer for The Associated Press, earlier this year.
In its October 2002 Report on Financial Statement Restatement
, the GAO said that restatements
for improper revenue recognition resulted in larger drops in market capitalization than any other type of restatement
Specifically, the report explores the number of, reasons for and other trends in financial statement restatements
since 1997; analyzes the impact of restatement
announcements on the restating companies' stock market capitalization; identifies available data to determine the impact of financial statement restatements
on investors' confidence in the existing U.