Rambus to Restate Earnings, Faces Possible Delisting
Staff Reporter -- EDN, July 19, 2006
Rambus Inc. said it will restate its previously issued financial statements to correct errors its audit committee has found related to the accounting of stock option grants.
In May, Rambus announced the assembly of an audit committee to investigate the company's stock option grant practices and related accounting amid the recent deluge of stock option backdating allegations in the industry.
"The audit committee had reached a conclusion that the actual measurement dates for certain historical stock option grants differ from the recorded grant dates for such awards," Rambus said today in a statement. "The audit committee has determined, based on further analysis, that non-cash stock-based compensation expenses should have been recorded with respect to those stock option grants and recognized over the vesting period of the options, and that the amount of such additional expenses is material."
The committee further determined that Rambus' previously issued financial statements for fiscal years 2003, 2004 and 2005, and the statements included in the company's Form 10-Q for the first quarter of fiscal 2006, should no longer be relied upon and will be restated.
Rambus said it will not file its quarterly report on Form 10-Q for the period ended June 30 by the due date of August 9 or the extended due date of August 14. As a result of the delay, Rambus said, its common stock may be subject to delisting from the Nasdaq National Market. Following receipt of such a notification, Rambus expects to request a hearing before a Nasdaq Listing Qualifications Panel.
"The audit committee is making every effort to complete its investigation, and the company will make every effort to file its restated financial statements as soon as practicable after the completion of the investigation," Rambus said.
