Openwave Updates on Stock Options
The Special Committee of the Company's Board of Directors is in the process of concluding its independent investigation relating to the Company's stock option grants and practices. The Special Committee to date has not found evidence that leads it to conclude that there was fraud or manipulation in the granting of options. While the results are not yet finalized, the Special Committee has determined that the measurement dates for financial accounting purposes for certain stock option grants differ from recorded grant dates for certain awards and will likely cause the Company to restate its financial statements. The Company is also reviewing the tax implications of these adjustments, but the Company has not completed its review nor reached any preliminary conclusions regarding the tax implications.
The Company does not expect a restatement to have an impact on previously reported revenue and cash. The restatement will likely relate to certain additional non-cash charges for stock-based compensation.
While the Company has not yet finalized the years to be restated or the amount of such charges, the Company intends to file its Form 10-K as quickly as practicable following the completion of the investigation by the Special Committee and the determination of the impact on the Company's financial statements.
As a matter of NASDAQ standard procedure, the Company anticipated and received on September 29, 2006, a NASDAQ Staff Determination indicating that the Company has failed to comply with the filing requirement for continued listing set forth in NASDAQ Marketplace Rule 4310(c)(14), and that its securities are, therefore, subject to delisting from the NASDAQ Global Select Market. The Company intends to timely request a hearing before the NASDAQ Listing Qualifications Panel to appeal the Staff Determination, and the delisting action will be automatically stayed pending the Panel's decision. The Company's stock will continue to be listed on NASDAQ until the Panel issues its decision and during any extension that is allowed by the Panel.
Based on the work of the Special Committee of the Board of Directors, on October 2, 2006, the Company concluded that all financial statements previously issued by the Company should no longer be relied upon. The Company's management and the Special Committee have discussed this matter with KPMG, the Company's independent registered public accounting firm.
Openwave Systems Inc. (Nasdaq: OPWV)