Whoops-oops! CDEx gets caught by auditors and the SEC booking phantom sales revenue from sales that are not bookable!!!
So much for the $900,000 for 2006 - a third of that was fake.
Oh well, I guess it's evident that BAXA, despite massive discounting, DID NOT MEET THE SALES QUOTA since those wrongly booked sales were not actually made.
Sounds like CDEx had no option to get another distributor, so gave BAXA a pass and amended the distribution agreement to allow non-performance of the 2006 sales quota.
LOL!!! I guess that's "strengthened" in MalcSpeak.
Over/under for 10-K remains March 15.
Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
In fiscal 2006, the Company sold and delivered Valimed (TM) units to Baxa which requested the units to be held at the Company's facility in Arizona , pending shipping instructions from Baxa's end-user customer. The Valimed (TM) units were paid for and revenue was reported in the company's second and third quarter 10QSB filings. Upon further review, and in consultation with its independent auditor and the SEC, the Company concluded on January 29, 2007 to revise its accounting procedure for such transactions and recognize revenue only at such time as the Company receives a fixed schedule for delivery from its customers. Accordingly, $252,000 and $112,000 of revenue previously recognized in the second and third quarters of 2006, respectively, will be reflected as deferred revenue in fiscal 2006, which the Company expects to recognize as revenue in fiscal 2007.
The Company expects to file amended 10-QSB's for the second and third quarter of 2006 and its 10-KSB for fiscal year 2006 by February 13, 2007.
AI
