TORONTO, Jan. 29 /CNW/ - Bioscrypt Inc. (TSX: BYT), a leading provider of
identity and access management solutions, today announced that it will restate
certain of its financial statements. This restatement does not impact the cash
flow or cash position of the Company.
In connection with the preparation of a management information circular
for a meeting of the Company's securityholders called to approve the plan of
arrangement pursuant to which L-1 Identity Solutions, Inc. will acquire all of
the Company's outstanding shares, management reviewed the historical financial
statements of the Company for the purposes of reconciling such statements with
Accounting Principles Generally Accepted in the United States of America (U.S.
GAAP). In the course of such review and reconciliation, management identified
certain otherwise bona fide transactions in the historical financial
statements of the Company with respect to which revenues should have been
deferred in accordance with the relevant standards. These transactions
involved Veri-Series product sales for which the Company provided unspecified
firmware upgrades and enhancements on a when and if available basis.
Management believes that revenues on these transactions are required to be
deferred and recognized over a four year period (to conform to the relevant
standards). The fiscal periods affected are years 2001 through 2007 and
interim periods within such years. Previously issued financial statements for
such years should not be relied upon. Financial statements for all affected
periods will be restated and refiled.
The estimated net impact of the restatement on reported revenue for the
nine months ended September 30, 2007 and fiscal 2006 is anticipated to be a
reduction of approximately $1.7 million and $3.3 million, respectively.
Reported deferred revenue is also estimated to increase by $12.3 million and
$16.7 million at September 30, 2007 and fiscal 2006, respectively. The
estimated net impact on reported net loss for the nine months ended
September 30, 2007 and fiscal 2006 is estimated to be an increase of
$0.9 million and $2.1 million, respectively.
Management and the board of directors believe, in consultation with
Deloitte & Touche LLP, the Company's external auditors, that Bioscrypt should
initially restate and refile its audited annual and unaudited quarterly
consolidated financial statements as of and for the fiscal years ended
December 31, 2005 and 2006, and its unaudited consolidated financial
statements for each of the quarters ended March 31, June 30, and September 30,
2006 and 2007. The cumulative impact on years before 2005 will be reflected in
an adjustment to opening deficit as of January 1, 2005.
The Company takes its obligation to provide accurate financial
information seriously and its internal controls remain strong overall.
It is anticipated that the balance of consolidated financial statements
will be filed with the securities regulatory authority in each province of
Canada and filed on SEDAR as soon as practicable. The special meeting of
Bioscrypt securityholders called for approval of the arrangement with L-1
Identity Solutions is expected to be held on February 29th, 2008.
About Bioscrypt Inc.
Bioscrypt is an enterprise access control solution provider, enabling the
unification of physical and logical access with its Door to Desktop(R)
products. Bioscrypt's hardware and software solutions deliver strong
authentication processes to facilities, equipment, IT networks and computer
applications and allow organizations to administer unified identities across
Building on its proven expertise in biometric technology and its unique
multi-factor authentication platform, Bioscrypt integrates all major secure
authentication standards, transforming how organizations are bridging the gap
between physical and logical access to create secure working environments.
More information is available at www.bioscrypt.com.
Forward-looking (safe harbour) statement
Statements made in this news release that relate to future plans, events
or performances are forward-looking statements. Any statement containing words
such as "believes", "plans", "expects" or "intends" and other statements which
are not historical facts contained in this release are forward-looking, and
these statements involve risks and uncertainties and are based on current
expectations. Consequently, actual results could differ materially from the
expectations expressed in these forward-looking statements.
Bioscrypt and Door to Desktop(R) are registered trademarks and
Veri-Series and VeriSoft are trademarks of Bioscrypt Inc. All other product
and company names mentioned are the property of their respective owners and
are mentioned for identification purposes only.
For further information:
For further information: Stephen McDonald, Bioscrypt Inc., (905)