iBasis to Restate
The Special Committee has concluded that the appropriate measurement dates for determining the accounting treatment of certain stock option grants differ from the measurement dates used by the Company in preparing its financial statements. As a result, the Company currently expects to record additional non-cash charges in the range of $10 million to $20 million for stock-based compensation over the period from December 1999 through April 2006. The Company has not yet completed its review of the amount to be recorded in any specific period, nor has the Company determined the tax consequences and any related liabilities that may result from these matters. The amounts to be recorded are subject to review and audit by the Company’s independent registered public accounting firm.
On October 18, 2006, the Audit Committee, in consultation with management and after discussion with the Company’s independent registered public accounting firm, concluded that the Company’s financial statements, including the reports of the Company’s independent registered public accounting firm thereon, and its earnings releases and similar communications for fiscal 1999 and subsequent periods should no longer be relied upon.
The Company expects to announce its financial results for the third quarter of fiscal 2006 after a final determination of the appropriate stock-based compensation expense for the periods affected has been made. The Company has not yet determined whether it will be able to file its related quarterly report on Form 10-Q in a timely manner. The Company will file its restated financial statements as soon as possible.
The Company also announced that, subsequent to the Company’s announcement on September 11, 2006 of the Special Committee review, it received a letter of informal inquiry from the United States Securities and Exchange Commission (SEC) relating to the Company’s historical stock option grants. The Company intends to cooperate fully with the SEC in this matter.
In accordance with the determinations of the Special Committee, the Company has terminated the employment of Jonathan D. Draluck, the Company’s Vice President, Business Affairs and General Counsel.
iBasis Inc. (Nasdaq: IBAS)