Business Context and Reporting Period
This Form 8-K is filed by pSivida Limited (not Eyepoint, Inc.) on June 17, 2008. The registrant is incorporated in Western Australia and is in the process of reincorporating to Delaware, United States. The report addresses a restatement of previously issued unaudited condensed consolidated financial statements for the quarters ended March 31, 2008, December 31, 2007, and September 30, 2007.
Key Financial Metrics
The filing does not provide current revenue, profit, cash flow, margin, debt, or liquidity figures. The only specific financial metric disclosed relates to a balance sheet adjustment:
- Goodwill and Additional Paid-in Capital: Increased by approximately $4.7 million for the periods ending March 31, 2008, December 31, 2007, September 30, 2007, and June 30, 2007.
- Impact on Operations: The error correction does not affect the Condensed Consolidated Statements of Operations or Cash Flows for the referenced periods.
Material Changes and Restatement Details
The Audit and Compliance Committee determined that previously issued financial statements for the specified quarters should no longer be relied upon. The material change stems from an accounting error identified during the audit for the year ended June 30, 2007, which was being prepared in U.S. dollars (US GAAP) to facilitate reincorporation.
- Root Cause: Incorrect translation of Australian dollar (A$) values for shares issued as purchase consideration in the December 2005 acquisition of Control Delivery Systems, Inc. The company used the exchange rate at the measurement date under A-IFRS instead of the rate required under US GAAP.
- Correction: The error resulted in an understatement of goodwill and additional paid-in capital, now corrected with an increase of approximately $4.7 million.
Outlook, Risks, and Management Commentary
Management and the Audit and Compliance Committee have discussed the matter with the independent registered public accounting firm. The company plans to file amended Quarterly Reports on Form 10-Q/A for the quarters ended March 31, 2008, December 31, 2007, and September 30, 2007, as soon as possible. The filing is incorporated by reference into several active registration statements on Form F-3.
Investor Verification Checklist
- Verify the filing of amended Form 10-Q/A reports for the quarters ended September 30, 2007, December 31, 2007, and March 31, 2008.
- Confirm the updated balance sheet values for goodwill and additional paid-in capital reflecting the $4.7 million adjustment.
- Monitor the progress of the company's reincorporation from Western Australia to Delaware.
- Note that the error does not impact historical operating income or cash flow figures.