Compensation

Silicon Storage Restating for Options

Flash-drive technology company's review of stock-grant dates leads to determination that nine years of results must be revised.
Stephen TaubJuly 24, 2007

Silicon Storage Technology Inc. said it expects to restate prior results covering nine years to correct errors related to accounting for stock-based compensation expense.

In March, the Sunnyvale, Calif.-based semiconductor company, specializing in flash-drive technology, announced it was undergoing a voluntary review of its historical stock-option grant practices covering all years since it went public in 1995. In that examination, the company said, it has found instances of the use of incorrect measurement dates for certain option grants.

Although it still has not completed the forensic review of the option grants and the financial impact of using incorrect measurement dates, Silicon Storage warned that all its financial statements and related communications since Jan. 1, 1997, should not be relied on. The company said it would revise results for fiscal years between 1997 and 2005, and for the first three quarters of 2006.

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The stock-based compensation charges it incurred will decrease reported net income or increase reported loss from operations and decrease the reported retained earnings figures contained in its historical financial statements.

The company said that it does not expect the restatements to impact its historical revenues or cash position for any period.

Further, the company said it intends “as soon as practicable” its restated financial statements and its delinquent annual report for the year ended 2006, along with its delinquent quarterly report for the quarter ended March 31, 2007.

Silicon Storage named James Boyd as its CFO. Boyd had served seven years as CFO for ESS Technology.