Thoughts, Comments and Research on Publicly Traded Companies and Internet Stock Message Boards

Tuesday, March 25, 2008

[LBWR]: June 6, 2007 - The First "Non-Reliance on Previously Issued Financial Statements" lowering Net Income

On June 6, 2007, Labwire, Inc. (LBWR) issued a press release advising the investment public not to rely on previously issued financial statements for the Company:

LBWR stated that

"Due to the receipt of $174,631 in late billing invoices from collection companies dating back to the third quarter of 2006, management has elected to restate their financial reporting for the quarters ended September 30, 2006 and December 31, 2006."

The net effect, according to the company, would be to reduce the Net Income for the last two quarters of 2006 by $135,761.

What Labwire, Inc. failed to mention in the press release and in the financial statements filed by the Company on June 5, 2007 is that this $135,761 negative adjustment to Net Income would result in Net Income for all of 2006 for LBWR to fall from a positive $73,793 to a negative $61,968 - A VERY SIGNIFICANT DEVELOPMENT.

This is particularly important because the Company (and the message board stock promoters) had continually publicized how it was in a positive net income mode. These results, of course, assume that the first two quarters of 2006 would not be adjusted downward, since no mention was made in this June 6th press release and in the filing by the company about adjusting the financial statements of the first two quarters of 2006.

Will these 2006 financial statements issued by LBWR again be adjusted downward by the Company?

Will there be another non-reliance of previously issued financial statements warning issued by LBWR later on over the same 2006 financial statements?

Keep in mind that the reason for the non-reliance and restatement is the collection of Accounts Receivable.

Did the Company fail to announce other significant downward adjustments to net income for 2006 at this point in time?

More on this later

[note: In case you wondered - yes, this June 6, 2007 press release is one of the "missing" press releases from Labwire, Inc.'s website]



Post a Comment

<< Home