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EX-99.1 - EX-99.1 - LIBERATOR MEDICAL HOLDINGS, INC. | g25500exv99w1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 9, 2010
LIBERATOR MEDICAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
NEVADA | 000-05663 | 87-0267292 | ||
(State or other jurisdiction Of incorporation) |
(Commission File Number) |
(IRS Employer Identification Number) |
2979 SE Gran Park Way, Stuart, Florida 34997
(772) 287-2414
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligations of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 4.02 | NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW |
On December 9, 2010, the Audit Committee (the Audit Committee) of the Board of Directors of
Liberator Medical Holdings, Inc. (the Company), after consultation with and upon the
recommendation of management, concluded that the Companys previously issued unaudited financial
statements as of and for the interim periods ended December 31, 2009, March 31, 2010, and June 30,
2010, contained errors in the application of certain accounting guidance that became effective for
the Company on October 1, 2009. As a result, the reports the Company filed on Form 10-Q with the
United States Securities and Exchange Commission (the SEC) for the interim periods ended December
31, 2009, March 31, 2010, and June 30, 2010, should no longer be relied upon.
During the course of the year-end audit of our financial statements by our independent registered
public accounting firm, the Company re-evaluated the accounting treatment of certain convertible
notes payable issued in May and October 2008 and converted into the Companys common stock in May
and October 2010, respectively, that contained embedded anti-dilution provisions whereby the
conversion price of the notes could have been adjusted if the Company had issued additional shares
of common stock or securities exercisable, exchangeable, or convertible into shares of common stock
at a price per share less than both the conversion price then in effect and $0.75, specifically, in
light of Accounting Standards Codification (ASC) 815-40-15, Derivatives and Hedging Contracts
in Entitys Own Equity (Scope and Scope Exceptions) (ASC 815-40-15) that became effective for
the Company on October 1, 2009.
Previously, the Company had concluded that the embedded anti-dilution provisions were indexed to
the Companys own stock under the ASC 815-40-15 guidance and did not change the accounting
treatment for the embedded conversion features when ASC 815-40-15 became effective for the Company
on October 1, 2009. However, after re-evaluating the accounting guidance issued under ASC 815-40-15
and our accounting treatment for the embedded conversion features during the year-end audit
process, the Company concluded that an error was made in the application of the ASC 815-40-15
guidance that the embedded anti-dilution provisions are not indexed to the Companys own stock and,
therefore, they are embedded derivative financial liabilities (the Embedded Derivatives) that
require bifurcation and separate accounting. Accordingly, the Company should have recorded a
cumulative effect adjustment to the opening balance of retained earnings on October 1, 2009.
Subsequently, the Company is required to adjust the Embedded Derivatives to fair value at each
balance sheet date, or interim period, and recognize the changes in fair value as a non-cash charge
or benefit to earnings, recorded below income from operations in the Companys statements of
operations.
2
The Companys management and the Audit Committee have discussed the matters disclosed in this Item
4.02 with the Companys independent registered public accounting firm. As soon as practical after
the date of the filing of this Form 8-K, the Company intends to file amended Form 10-Qs for the
interim periods ended December 31, 2009, March 31, 2010, and June 30, 2010, with the SEC.
The effects of the restatements presented below are estimates that are subject to change based upon
our final analysis and review of the adjustments. The following is a summary of the effects that
the restatement adjustments will have on the Companys unaudited financial statements for each of
the interim periods to be amended for fiscal year 2010:
As of and for the three months ended December 31, 2009 (dollars in thousands, except per share
amounts):
Cumulative | ||||||||||||||||
Effect | ||||||||||||||||
As | Adjustment | Current | ||||||||||||||
Previously | as of | Period | As | |||||||||||||
Reported | 10/1/2009 | Effect | Restated | |||||||||||||
Balance Sheet Data: |
||||||||||||||||
Current Assets |
$ | 12,697 | $ | | $ | | $ | 12,697 | ||||||||
Total Assets |
16,986 | | | 16,986 | ||||||||||||
Current Liabilities |
11,860 | 5,224 | 5,271 | 22,355 | ||||||||||||
Total Liabilities |
12,601 | 5,224 | 5,271 | 23,096 | ||||||||||||
Additional Paid in
Capital |
11,820 | (390 | ) | | 11,430 | |||||||||||
Accumulated Deficit |
(7,418 | ) | (4,834 | ) | (5,271 | ) | (17,523 | ) | ||||||||
Total Equity (Deficit) |
$ | 4,385 | $ | (5,224 | ) | $ | (5,271 | ) | $ | (6,110 | ) | |||||
For the three months ended December 31, 2009 | ||||||||||||
As | Current | |||||||||||
Previously | Period | As | ||||||||||
Reported | Effect | Restated | ||||||||||
Statement of Operations Data: |
||||||||||||
Income from Operations |
$ | 1,160 | $ | | $ | 1,160 | ||||||
Other Income (Expense): |
||||||||||||
Interest Expense |
(243 | ) | (173 | ) | (416 | ) | ||||||
Change in fair value of
derivative liabilities |
| (5,099 | ) | (5,099 | ) | |||||||
Total Other Income (Expense) |
(240 | ) | (5,271 | ) | (5,511 | ) | ||||||
Net Income (Loss) |
$ | 854 | $ | (5,271 | ) | $ | (4,417 | ) | ||||
Basic Earnings (Loss) per Share |
$ | 0.03 | $ | (0.16 | ) | (0.13 | ) | |||||
Diluted Earnings (Loss) per Share |
$ | 0.02 | $ | (0.15 | ) | (0.13 | ) |
3
As of and for the three and six months ended March 31, 2010 (dollars in thousands, except per
share data):
Cumulative | ||||||||||||||||
Effect | ||||||||||||||||
As | Adjustment | Current | ||||||||||||||
Previously | as of | Period | As | |||||||||||||
Reported | 10/1/2009 | Effect | Restated | |||||||||||||
Balance Sheet Data: |
||||||||||||||||
Current Assets |
$ | 20,796 | $ | | $ | | $ | 20,796 | ||||||||
Total Assets |
26,524 | | | 26,524 | ||||||||||||
Current Liabilities |
12,697 | 5,224 | 5,503 | 23,424 | ||||||||||||
Total Liabilities |
14,405 | 5,224 | 5,503 | 25,132 | ||||||||||||
Additional Paid in
Capital |
19,291 | (390 | ) | | 18,901 | |||||||||||
Accumulated Deficit |
(7,161 | ) | (4,834 | ) | (5,503 | ) | (17,498 | ) | ||||||||
Total Equity (Deficit) |
$ | 12,119 | $ | (5,224 | ) | $ | (5,503 | ) | $ | 1,392 | ||||||
For the three months ended March 31, | For the six months ended March 31, | |||||||||||||||||||||||
2010 | 2010 | |||||||||||||||||||||||
As | Current | As | Current | |||||||||||||||||||||
Previously | Period | As | Previously | Period | As | |||||||||||||||||||
Reported | Effect | Restated | Reported | Effect | Restated | |||||||||||||||||||
Statement of Operations Data: |
||||||||||||||||||||||||
Income from Operations |
$ | 360 | $ | | $ | 360 | $ | 1,521 | $ | | $ | 1,521 | ||||||||||||
Other Income (Expense): |
||||||||||||||||||||||||
Interest Expense |
(229 | ) | (173 | ) | (402 | ) | (472 | ) | (345 | ) | (817 | ) | ||||||||||||
Change in fair value of
derivative liabilities |
| (59 | ) | (59 | ) | | (5,158 | ) | (5,158 | ) | ||||||||||||||
Total Other Income (Expense) |
(226 | ) | (232 | ) | (458 | ) | (466 | ) | (5,503 | ) | (5,969 | ) | ||||||||||||
Net Income (Loss) |
$ | 256 | $ | (232 | ) | $ | 24 | $ | 1,111 | $ | (5,503 | ) | $ | (4,392 | ) | |||||||||
Basic Earnings (Loss) per Share |
$ | 0.01 | $ | (0.01 | ) | $ | 0.00 | $ | 0.03 | $ | (0.16 | ) | $ | (0.13 | ) | |||||||||
Diluted Earnings (Loss) per Share |
$ | 0.01 | $ | (0.01 | ) | 0.00 | $ | 0.02 | $ | (0.15 | ) | $ | (0.13 | ) |
As of and for the three and nine months ended June 30, 2010 (dollars in thousands, except per
share data):
Cumulative | ||||||||||||||||
Effect | ||||||||||||||||
As | Adjustment | Current | ||||||||||||||
Previously | as of | Period | As | |||||||||||||
Reported | 10/1/2009 | Effect | Restated | |||||||||||||
Balance Sheet Data: |
||||||||||||||||
Current Assets |
$ | 22,167 | $ | | $ | | $ | 22,167 | ||||||||
Total Assets |
28,436 | | | 28,436 | ||||||||||||
Current Liabilities |
9,898 | 5,224 | (2,869 | ) | 12,253 |
4
Cumulative | ||||||||||||||||
Effect | ||||||||||||||||
As | Adjustment | Current | ||||||||||||||
Previously | as of | Period | As | |||||||||||||
Reported | 10/1/2009 | Effect | Restated | |||||||||||||
Total Liabilities |
10,531 | 5,224 | (2,869 | ) | 12,886 | |||||||||||
Additional Paid in
Capital |
24,274 | (390 | ) | 4,813 | 28,697 | |||||||||||
Accumulated Deficit |
(6,364 | ) | (4,834 | ) | (1,944 | ) | (13,142 | ) | ||||||||
Total Equity (Deficit) |
$ | 17,905 | $ | (5,224 | ) | $ | (2,869 | ) | $ | 15,550 |
For the three months ended June 30, | For the nine months ended June 30, | |||||||||||||||||||||||
2010 | 2010 | |||||||||||||||||||||||
As | Current | As | Current | |||||||||||||||||||||
Previously | Period | As | Previously | Period | As | |||||||||||||||||||
Reported | Effect | Restated | Reported | Effect | Restated | |||||||||||||||||||
Statement of Operations Data: |
||||||||||||||||||||||||
Income from Operations |
$ | 942 | $ | | $ | 942 | $ | 2,461 | $ | | $ | 2,461 | ||||||||||||
Other Income (Expense): |
||||||||||||||||||||||||
Interest Expense |
(150 | ) | (139 | ) | (289 | ) | (621 | ) | (484 | ) | (1,105 | ) | ||||||||||||
Change in fair value of
derivative liabilities |
| 3,698 | 3,698 | | (1,459 | ) | (1,459 | ) | ||||||||||||||||
Total Other Income (Expense) |
(142 | ) | 3,559 | 3,417 | (607 | ) | (1,944 | ) | (2,551 | ) | ||||||||||||||
Net Income (Loss) |
$ | 798 | $ | 3,559 | $ | 4,357 | $ | 1,908 | $ | (1,944 | ) | $ | (36 | ) | ||||||||||
Basic Earnings (Loss) per Share |
$ | 0.02 | $ | 0.08 | $ | 0.10 | $ | 0.05 | $ | (0.05 | ) | $ | (0.00 | ) | ||||||||||
Diluted Earnings (Loss) per Share |
$ | 0.02 | $ | 0.06 | $ | 0.08 | $ | 0.04 | $ | (0.04 | ) | $ | (0.00 | ) |
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
(c) | Exhibits |
Exhibit No. | Description | |
99.1
|
Press release issued by Liberator Medical Holdings, Inc., on December 10, 2010. |
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
LIBERATOR MEDICAL HOLDINGS, INC. Registrant |
||||
Dated: December 10, 2010 | /s/ Mark A. Libratore | |||
Mark A. Libratore, President | ||||
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