Teletouch Announces It Will Restate Financial Results for the Fiscal Quarters Ended November 30, 2005 and February 28, 2006 for
29 July 2006 - 10:59AM
Business Wire
Teletouch Communications, Inc. (AMEX:TLL), announced today that the
Company will restate its interim financial statements for fiscal
year 2006 second and third quarters ended November 30, 2005 and
February 28, 2006. The Company's determination to restate the
results of these quarters was a result of an analysis of the fiscal
year end tax consequences of the November 2005 conversion by TLL
Partners, LLC of 1,000,000 shares of the Company's Series C
preferred stock into 44,000,000 shares of the Company's common
stock (the "Conversion"), which resulted in TLL Partners owning a
controlling interest at approximately 89.2% of the Company. TLL
Partners, LLC, ("TLLP") is a Delaware limited liability company
owned by Progressive Concepts Communications, Inc. ("PCCI"). Prior
to November 2005, PCCI filed a consolidated tax group return with
its wholly-owned subsidiaries, Progressive Concepts, Inc. ("PCI"),
State Hawk Security, Inc. ("SHS") and TLLP. Effective November 1,
2005, the Company became a member of the PCCI tax group, as PCCI
gained voting control of the Company through the Conversion. In
accordance with the related IRS rules and regulations, members of
an affiliated corporate group with greater than 80% voting control
must be included in a consolidated tax return. The Company accounts
for its taxes under Statement of Financial Accounting Standard 109
("SFAS 109"), which resulted in the Company's recording a net
deferred tax asset as of November 30, 2005 of approximately
$142,000. As a result of joining the PCCI tax group, the Company
should have recorded an additional valuation allowance that would
have the effect of reducing the net assets of the Company by
$142,000 resulting in an increase to the Net Loss reported for the
three months ended November 30, 2005 from $122,000 to $264,000. The
Company has evaluated the effect of the foregoing technical error
and although non-cash related in nature, has deemed the effect as
material to the financial statements for the fiscal quarters ended
November 30, 2005 and February 28, 2006, thereby requiring the
restatements. Therefore, until the Company has restated and
reissued its results for the applicable periods, investors and
other users of the Company's SEC filings are cautioned not to rely
on the Company's financial statements for the fiscal quarters ended
November 30, 2005 and February 28, 2006, to the extent they are
affected by the accounting issue described above. The Company
intends to file its amended and restated financial statements with
the SEC as soon as possible after the completion of its discussions
with the SEC staff in regard to the technical accounting issues at
hand. The expected effect of the aforementioned adjustments to the
Company's financial statements is shown below: -0- *T Selected
Balance Sheet Captions ($000's) November 30, 2005 February 28, 2006
As As Reported Adjustment Restated Reported Adjustment Restated
--------------------------- ---------------------------- Total
Assets $ 9,518 $ (142)$ 9,376 $ 9,445 $ (176)$ 9,269
--------------------------- ---------------------------- Total
Shareholders' Equity $ 2,745 $ (142)$ 2,603 $ 2,842 $ (176)$ 2,666
--------------------------- ---------------------------- Selected
Income Statement Captions ($000's except per share amounts) Three
Months Ended Six Months Ended November 30, 2005 November 30, 2005
As As Reported Adjustment Restated Reported Adjustment Restated
--------------------------- ---------------------------- Provision
for income taxes $ - $ 142 $ 142 $ - $ 142 $ 142
--------------------------- ---------------------------- Net loss $
(122)$ (142)$ (264)$ (553) $ (142)$ (695)
--------------------------- ---------------------------- Basic and
diluted loss per share $ -= $ - $ - $ - $ - $ -
--------------------------- ---------------------------- Three
Months Ended Nine Months Ended February 28, 2006 February 28, 2006
As As Reported Adjustment Restated Reported Adjustment Restated
--------------------------- ---------------------------- Provision
for income taxes $ - $ 34 $ 34 $ - $ 176 $ 176
--------------------------- ---------------------------- Net income
(loss) $ 19 $ (34)$ (15)$ (534) $ (176)$ (710)
--------------------------- ---------------------------- Basic and
diluted loss per share $ - $ - $ - $ (0) $ (0)$ (0)
--------------------------- ---------------------------- *T About
Teletouch Communications Teletouch offers a comprehensive suite of
telecommunications services, including cellular, two-way radio
communications, GPS-telemetry and wireless messaging services
throughout the United States. TLL acquires, bills and supports a
large, primarily commercial business and government base of
subscribers, under its own network of FCC licensed spectrum in
Texas, Louisiana, Arkansas, Oklahoma, Alabama, Missouri,
Mississippi, Tennessee, and Florida. Teletouch's common stock is
traded on the American Stock Exchange under stock symbol: TLL.
Additional information about Teletouch can be found at:
www.teletouch.com. All statements in this news release that are not
based on historical fact are "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995
and the provisions of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended (which Sections were adopted as part of the Private
Securities Litigation Reform Act of 1995). While management has
based any forward-looking statements contained herein on its
current expectations, the information on which such expectations
were based may change. These forward-looking statements rely on a
number of assumptions concerning future events and are subject to a
number of risks, uncertainties, and other factors, many of which
are outside of our control, that could cause actual results to
materially differ from such statements. Such risks, uncertainties,
and other factors include, but are not necessarily limited to,
those set forth under the caption "Additional Factors That May
Affect Our Business" in the Company's most recent Form 10-K and
10-Q filings, and amendments thereto. In addition, we operate in a
highly competitive and rapidly changing environment, and new risks
may arise. Accordingly, investors should not place any reliance on
forward-looking statements as a prediction of actual results. We
disclaim any intention to, and undertake no obligation to, update
or revise any forward-looking statement.
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