Pareteum to restate previously issued financial statements
Pareteum announced that the company will restate its previously issued consolidated financial statements as of and for the full year ended December 31, 2018, and interim periods ended March 31, 2019 and June 30, 2019. This decision was approved by the company's Board of Directors upon the recommendation of the company's Audit Committee, and after consultation with management and the company's independent registered public accounting firm. Investors should no longer rely upon the company's previously released financial statements for the time periods cited above. Similarly, related press releases, earnings releases, and investor communications describing the company's financial statements for these periods should no longer be relied upon. The decision to restate these financial statements is based on the company's conclusion that certain revenues recognized during 2018 and 2019 should not have been recorded during that period. For certain customer transactions, the company may have prematurely or inaccurately recognized revenue. These restatements should not impact historical cash or cash equivalents based upon the current review. At the present time, the restatements are expected to impact Revenue, Cost of Service, Operating Income, Net Loss, Accounts Receivable and other Balance Sheet line items. While the company's analysis is still underway, the company currently estimates the revenue impact for the full year 2018 to be a reduction of approximately $9 million. For the first half of 2019, the company currently estimates the revenue impact to be a reduction of approximately $24 million. At this time, the company has not fully completed its review and the expected financial impact of the restatement described above is preliminary and subject to change. The company cannot predict the aggregate amount of revenue that will ultimately be restated, whether additional periods beyond those referenced above will be affected, and the final outcome or timing of the company's filing of restated financial statements for the affected annual and quarterly periods. Until the full magnitude of these transactions is analyzed and understood, the company cannot provide forward guidance, and expects financial results for the second half and full year 2019 will be materially below current analysts' estimates.