SHANGHAI & ATLANTA -- CDC Software (NASDAQ: CDCS) will hold a conference call to discuss the company's earnings and operating results for the quarter ended June 30, 2011 on Thursday, August 25, 2011 at 8:30 A.M. EDT. An earnings release will be distributed prior to the call.
About CDC SoftwareOne source of the restatements was the application of the purchase price for the acquisition of United. Significant adjustments from this were the $357,809 reclassification of purchase price from fixed assets to goodwill. The second source of restatement was the reclassification of $99,013 of Additional Paid In Capital primarily to Preferred Convertible Shares. Finally, there was a significant restatement of expense due the proper GAAP accounting for several Derivative Instruments the Company has on its balance sheet. These are Convertible Notes Payable that have a variable conversion feature that is dependent on the price of the stock at the time of conversion. This primarily resulted in a derivative liability of $845,921, a loss on the valuation of the derivative at period end of $37,418, discounts to notes payable of $232,801, and amortization expense of $67,366. All of these adjustments were made to the financial statements for the three months ended March 31, 2010 and were presented in the Form 10Q for the period ended March 31, 2011. However, there are some additional adjustments related to the derivative liability for the three and six months ended June 30, 2010.The Company considers a number of liquidity and working capital performance ratios in evaluating its financial condition. The following table includes certain ratios, working capital information, and summarized cash flows for use in understanding current liquidity and recent trends in this area:Contact: James Crimi Investor Relations 1-512-464-1226 Email ContactThe modified EBITDA balance for the three months ended June 30, 2011 was a loss of $28,000 compared to a gain of 155,000 for the same period in 2010. The difference is primarily a result of increased operating expenses at Turnbull in the amount of $98,000 over the previous year and the operating loss at United of $98,000, compared to income of $1,000 for the same period in 2010. The loss at United is the result of heavy rain and flooding in North Dakota that had a significant negative impact on fuel sales for the quarter.
As noted above, this Quarterly Report for the three month period ended June 30, 2011 on Form 10-Q included for the first time, restated figures for the period ended June 30, 2010. The Notes to those financial statements detail all the adjustments. In sum, Total Assets and Liabilities and Stockholders' Deficit were reduced by $392,000 to $6.8 million. Net income increased by $10,000 to $16,000.The Company has tried to identify any forward-looking statements contained in this press release using words such as "anticipates," "believes," "estimates," "expects," "plans," "intends," "potential" and similar expressions. These statements reflect the Company's current beliefs and are based upon information currently available to it. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance or achievements to differ materially from those expressed in or implied by such statements. The Company undertakes no obligation to update or provide advice in the event of any change, addition or alteration to the information catered in this press release including such forward-looking statements. Refer to "Item 1A - Risk Factors" in our Form 10-K for the year ended December 31, 2010 filed with the Securities and Exchange Commission for a discussion regarding our exposure to risks. Additionally, new risk factors emerge from time to time and it is not possible for us to predict all such factors, nor to assess the impact such factors might have on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results.
CDC Software’s acquisitions are part of its “integrate, innovate and grow” strategy. Fueling the success of this strategy is the company’s global scalable business and technology infrastructure featuring multiple complementary applications and services, domain expertise in vertical markets, cost effective product engineering centers in India and China, a highly collaborative and fast product development process utilizing Agile methodologies, and a worldwide network of direct sales and channel operations. This strategy has helped CDC Software deliver innovative and industry-specific solutions to more than 10,000 customers worldwide within the manufacturing, distribution, transportation, retail, government, real estate, financial services, health care, and not-for-profit industries. For more information, please visit www.cdcsoftware.com.
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