Business
Statement re Treatment of Warrants
Statement re Treatment of Warrants.
About this update from Mti Wireless Edge Ltd
[{"type":"text","content":"\n \n7 November 2007\n\n MTI Wireless Edge Limited \n\n Restatement of Warrant Treatment \n\nMTI Wireless Edge Ltd., (ticker: MWE) (\"MTI\" or \"the Company\"), a market leader\nin the manufacture of flat panel antennas for fixed wireless broadband, today\nannounces that following advice from its auditors, Ziv Haft BDO member firm, it\nwill change how it accounts for its treatment of Warrants in its financial\nstatements for the periods from 31 March 2006 to 30 June 2007 inclusive, and\nwill restate those statements.\n\nThe restatement relates to the 3,730,631 warrants (the \"Warrants\") provided to\ncertain investors. These Warrants contain an option to be exercised on a\n\"cashless\" basis (allowing the investors to get less shares but with no payment\nfor the exercise, resulting in a lower dilution to existing shareholders). Our\nauditors have advised us that according to IAS-32 and IAS-39 these Warrants\nshould be recorded at their fair value as a liability instead of Company's\nequity on the IPO date, and thereafter in each financial reporting statement be\nmarked to market by adjusting the liability against financial income or\nexpenses as applicable.\n\nIt is important to note that this restatement does not have any effect on the\nCompany's cash flow.\n\nThe influence of the restatement on:\n\nThe Company's Balance Sheet - Upon registration of the Warrants the Company\nshould have included a liability of USD 1.4m against a decrease in its equity.\nAs of 30 June 2006, 31 December 2006 and 30 June 2007 the liability should be\nrecorded at USD 1.1m, USD 1.25m and USD 0.9m, respectively.\n\nCompany's Profit and Loss statement - restatement of financial income of USD\n0.3m, USD 0.17m and USD 0.34m in the profit and loss statement for the six\nmonths ended 30 June 2006, the year ended 31 December 2006 and the six months\nended 30 June 2007 respectively.\n\nThe Company intends to release its financial statements for the third quarter\nof 2007 on 19 November 2007, and will release restated figures for June 2006,\nDecember 2007 and June 2007 at that time.\n\nIn its future financial reports the Company intends to identify the influence\nof the Warrants registration separately on its profit and loss statement as the\naccounting treatment of these Warrants does not affect the underlying trading,\nearnings, prospects and financial pos...