Stratey, they've still got some date issues on the Statement of Stockholders' Equity too. I agree with you on all counts, but my perception of where that puts us is a little different. The $3 million prior period adjustment was done when the 3rd quarter financials were released, and while the initial posting of revenues based on orders and not on delivered product was egregious and most probably intentional on Moody's part, Wicks' cleaning up that mess is a positive sign. These corrections only confirmed what we knew from comparing the revenues and retained deficit in the audited financials attached to the SB-2 filed in December 2005 with the unaudited financials that were released publicly.
As for the Negative Working Capital, that's been an ongoing issue as it is with many if not most development stage companies. The issue of the capitalized development costs has been addressed to some extent before as to what comprised that number. On the audited financials in the SB-2 for 12/31/04 there was $28,600 in Capitalized Software on the Balance Sheet. That number had risen to $995,752 with the unaudited 9/30/05 financials (also included in the SB-2) where it stayed through the 12/31/06 financials. It then rose to $1,877,040 on the 3/31/06 and 6/30/06 financials statements, the last one published under Moody's watch. It was reduced to $1,029,167 on the 9/30/06 financials when the restatement was done, and categorized as CT Development as opposed to Capitalized Software. I think this probably reflects more accurately the costs that should be capitalized, as well as the character of the costs since ActSoft provides the tracking software and the OS is Linux so only specially written mods or add-ons and plug-ins for those would probably capitalizable. I don't know who is actually handling the financial side of things now, so I do not know their qualifications or understanding of current GAAP and SEC reporting requirements.
