Terayon Communication Systems (fka TERN)

[SEBASS]

Restatment of finances to be completed by the end of the 2006 calendar year.

TERN: Plans to Restate Financial Statements

http://www.knobias.com/story.htm?eid=3.1.4aaa07658d3a7885bf42a8c7607fdf97aa925e5a63a70fd8a000d5d22b4...

Wednesday, November 08, 2006 09:18ET

By Scott Taylor, [e-mail]

Terayon Communication Systems, Inc. (TERN) announced that the Audit Committee of the Board of Directors, upon the recommendation of management, has concluded that the Company's consolidated financial statements for the years ended December 31, 2003, 2002 and 2000 and for the quarters of 2003, 2002 and 2000 should no longer be relied upon. The restatement of financial statements for 2003 will correct errors primarily relating to the recognition of revenue, cost of goods sold and estimates of reserves. The restatement of financial statements for 2000 and 2002 will correct errors primarily relating to the need to separately value and account for an embedded derivative option associated with the Company's 5% convertible subordinated notes issued in July 2000, and other accrual estimates.

Management currently expects the audit, re-audit and restatement process, as well as the filings of its periodic reports with restated financial statements, to be completed by the end of the 2006 calendar year.