Arbinet-thexchange, Inc., plans to restate its 2004 and 2005 year-find financial statements. In a press release published Monday, the telecommunications company reported that its audit committee has noted that the company’s financial statements incorrectly treated some five-year stock option arrangements as though they were nine-year arrangements.
Arbinet will file an amended 10-K for the year ending December 31, 2005, and make adjustments for those years “as soon as practicable.” The company still plans to file its 10-Q for the past quarter on time.
Arbinet blames the errors on a “misinterpretation” of when the stock option agreements ended. Certain stock option agreements with a five-year term were treated as though they had a nine-year term.
To make the adjustments in its amended filing for 2004 and 2005, Arbinet plans to increase noncash compensation on its consolidated statement of operations by approximately $1.3 million ($200,000 for 2004 and $1.1 million for 2005). The company says the adjustments will not affect its cash position or reported revenue for the recently completed quarter. The stock options in question were granted before Arbinet’s IPO in 2004.