National Holdings Corp. announced today that the full service investment banking company has corrected an accounting error in which certain revenues and operating expenses were understated in the fiscal quarter ended December 31, 2009 and March 31, 2010.
Before anyone panics, the accounting error didn’t affect the cash flows from operating, investing, or financing activities of prior time periods. The margins of correction are less than .6% of the total amount of revenues previously listed. To be exact, Revenues were overstated by approximately $61,000 and $157,000, or 0.22% and 0.54%, respectively. Operating expenses were understated by approximately $113,000 and $16,000, or 0.39% and 0.05%, respectively. The new figures for the Company are as follows.
For the three months ended as of December 31, 2009 and March 31, 2010, respectively:
• Revenues will be revised from $28,388,000 to $28,326,000 and from $29,051,000 to $28,894,000,
• Net loss per common share will be revised from $0.03 to $0.04 per share and from $0.06 to $0.07 per share on a fully diluted basis respectively, and
• EBITDA, adjusted to exclude non-cash compensation expense and write down of forgivable loans, will be revised from $659,000 to $485,000 and from $593,000 to $453,000.
For the six month period ended March 31, 2010:
• Revenues will be revised from $57,439,000 to $57,220,000,
• Net loss per common share will be revised from $0.09 to $0.11 per share on a basic and fully diluted basis, and
• EBITDA, adjusted to exclude non-cash compensation expense and write down of forgivable loans, will be revised from $1,253,000 to $938,000.
The reason for these errors was due to duplicative entries to accrue month end commission revenues on a trade date basis and a net understatement of general accrued expenses including compensation expense, taxes, licenses and registration and other administrative expenses. National Holdings management team has gone into action and have set up a stronger internal control system and assures its shareholders that such errors will not be repeated in future Q’s.