The Center for Wound Healing to Restate Certain 2008 and 2009 Financial Results
TARRYTOWN, N.Y.-(Business Wire)-September 10, 2009 - The Center for Wound Healing, Inc. (OTCBB:CFWH), a leading operator of comprehensive wound care treatment centers that offer hyperbaric oxygen therapy as well as other advanced wound care treatment modalities, today announced that the Company’s consolidated financial statements for the quarter ended March 31, 2008 and for the year ended June 30, 2008 need to be restated as described below, and that investors should no longer rely upon those consolidated financial statements. The Company will file an amendment to the 2008 Form 10-QSB and 2008 Form 10-KSB to restate the 2008 Financial Statements as soon as practicable.
The Company also announced that consolidated financial statements for the quarterly periods ended September 30, 2008, December 31, 2008 and March 31, 2009 need to be restated as described below and that investors should also no longer rely upon the 2009 Financial Statements. The need to restate the aforementioned financial statements was determined in consultation with the Company’s independent auditors as they were preparing the Form 10-KSB for the year ended June 30, 2009, the first periodic financial statement since their engagement. The Company’s former auditors also have been consulted, and concur with the restatement.
The aggregate effect of the restatements will be to decrease the Company’s consolidated net loss by $460,000 for the year ended June 30, 2008, and by $800,000 for the nine months ended March 31, 2009; and to increase the Company’s consolidated stockholders' equity by $4.0 million at June 30, 2008, and $4.8 million at March 31, 2009.
The restatements result from a correction to previous accounting used in the $17.5 million financing the Company consummated on March 31, 2008 with Bison Capital Equity Partners. In particular, a modification needed to be made to the Black Scholes model related to the pricing of warrants issued to Bison Capital Equity Partners to purchase shares of the Company’s common stock, the amortization of costs associated with such financing, and the issuance of appropriate number of warrants. Specifically, it was determined that noncash interest expense was overstated, shareholders’ equity was understated, and long-term liabilities and other assets were overstated.
About The Center for Wound Healing
The Center for Wound Healing, Inc. is a leading manager of comprehensive wound care treatment centers that offer hyperbaric oxygen therapy (HBO) as well as traditional wound care treatment modalities. The Company manages 35 wound care centers in the eastern United States in partnership with local acute care hospitals. CFWH was founded by physicians in 1997 with a focus on establishing in-hospital centers of excellence to treat the growing incidence of severe grade diabetic wounds of the lower extremities and wounds that are unresponsive to general wound care treatments. The Company’s centers have consistently achieved high treatment success rates, resulting in a dramatic increase in patient quality of life and significant cost savings to the healthcare system.
Forward-Looking Statements
Statements contained herein that are not historical facts may be forward-looking statements within the meaning of the Securities Act of 1933, as amended. Forward-looking statements include statements regarding the intent, belief or current expectations of the Company and its management. Such statements are estimates only, as the Company has not completed the preparation of its restated financial statements for the periods mentioned in this news release, nor has its auditor completed the audit of those results. Such statements reflect management's current views, are based on certain assumptions and involve risks and uncertainties. Actual results, events, or performance may differ materially from the above forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors. The Center for Wound Healing undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in The Center for Wound Healing's expectations with regard to these forward-looking statements or the occurrence of unanticipated events. Factors that may impact The Center for Wound Healing's success are more fully disclosed in The Center for Wound Healing's most recent public filings with the U.S. Securities and Exchange Commission.
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