Liberate to Restate Sales as Investigation Widens
Liberate Technologies Inc., a leading supplier of software for TV set-top boxes, announced late Thursday that auditors have found more evidence of questionable accounting, forcing the company to restate more than 10% of its revenues since mid-2001.
The company also said it had placed its chief operating officer, Donald Fitzpatrick, on leave until the investigation was finished. The revised financial reports are expected in December.
The announcement, issued after the markets closed, worsened what already has been a tough year for the company. Liberate’s stock has lost almost 90% of its value since January. It lost 34 cents Thursday to close at $1.53 in regular Nasdaq trading.
The revelations stemmed from an investigation launched last month.
The audit committee initially questioned the “appropriateness and timing” of recognizing $1.84 million in software licensing revenue from a single transaction. But the subsequent investigation turned up more transactions with questionable accounting, totaling about $10 million in revenue from June 2001 to August 2002.
Liberate, based in San Carlos, Calif., withdrew its previous projections for sales and expenses on Thursday. The company also said that sales for the current three-month period will be “materially below” its previous $15-million to $20-million projection.
