Raptor Networks Technology Inc announced Wednesday that it plans to restate its financial results because it incorrectly interpreted the accounting guidelines for convertible note and warrant financing transactions it conducted in July 2006 and January 2007. It also said it would delay its next quarterly report until it had filed its restated financials.
The Santa Ana, California-based technology firm said it would restate the quarters ending September 30, 2006 and March 31, 2007 and the year ended December 31, 2006. According to Raptor, the company incorrectly accounted for the amount by which the value of the conversion feature of its notes and the value of the related warrants exceeded the proceeds of the financing.
The carrying value of the excess amounted to $2,291,478 at September 30, 2006, $1,979,004 at December 31, 2006 and $15,855,749 at March 31, 2007. The company capitalized this amount in its consolidated balance sheets and was amortizing it over the life of the notes. On Tuesday, however, company officials decided that the initial amounts by which the values exceeded the proceeds from the notes should have been expensed immediately.
The company said it plans to file an 8-K containing additional details about the restatement with the Securities and Exchange Commission, but had not done so at the time CFO.com published this article.