SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 19, 2010
CYBERDEFENDER CORPORATION
(Exact name of Company as specified in Charter)
Delaware | 333-138430 | 65-1205833 | ||
(State or other jurisdiction of incorporation or organization) | (Commission File No.) | (IRS Employee Identification No.) |
617 West 7th Street, Suite 1000
Los Angeles, California 90017
(Address of Principal Executive Offices)
213-689-8631
(Issuer Telephone number)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions (see General Instruction A.2 below).
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)). |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13(e)-4(c)) |
Item 4.02a Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
During the course of preparing our September 30, 2010 Form 10-Q the following adjustments were identified : (i) the Black Scholes value of the warrants issued by the Registrant in March 2009 pursuant to a Media and Marketing Services Agreement should have been classified as an operating expense rather than interest expense and that the Black Scholes value of such warrants should be measured as of each monthly vesting date rather than the grant date starting from March 2009 through September 2010; (ii) certain warrants issued to consultants must be revalued as of their respective vesting dates rather than the grant date, using the Black Scholes method; and (iii) all of the Registrant’s advertising expenses starting in the fourth quarter of 2009 should have been expensed as incurred rather than capitalized and amortized against revenues for a period of 12 months under ASC 340-20 (collectively, the “Adjustments”).
On November 19, 2010, the Audit Committee of the Registrant’s Board of Directors determined to restate the Company’s financial statements for the year ended December 31, 2009 and the quarters ended March 31, 2009 and 2010, June 30, 2009 and 2010 and September 30, 2009 in order to make the Adjustments. Accordingly, the financial statements contained in the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009, which was filed with the SEC on March 31, 2010, and the Registrant’s Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 2009, which were filed with the SEC on May 15, 2009, August 14, 2009 and November 12, 2009, respectively, and March 31 and June 30, 2010, which were filed with the SEC on May 17, 2010 and August 9, 2010, respectively, should no longer be relied upon.
Management believes the Adjustments will not cause any changes to revenues, net sales or gross profit for the periods to be restated, however, the Registrant’s financial statements have not been re-reviewed or re-audited. On October 11, 2010, the Registrant engaged Grant Thornton LLP as the Registrant’s independent registered public accounting firm to perform a review of the September 30, 2010 10Q and to perform a re-audit of the December 31, 2009 and 2008 financial statements. The Registrant expects this process to be completed as soon as practicable, whereupon the Registrant plans to file an amendment to its Form 10-K for the year ended December 31, 2009 and amendments to its Form 10-Qs for all quarterly periods of 2009 and for the quarters ended March 31 and June 30, 2010.
As a result of the pending Adjustments, the Registrant is unable to file its Form 10-Q for the quarter ended September 30, 2010 until the foregoing amendments and restatements are filed.
The effects of the identified Adjustments are illustrated below.
2
December 31, 2009 | March 31, 2010 | June 30, 2010 | ||||||||||||||||||||||||||||||||||
Restated | Adjustments | As Filed | Restated | Adjustments | As Filed | Restated | Adjustments | As Filed | ||||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||||||
CURRENT ASSETS: | ||||||||||||||||||||||||||||||||||||
Cash | $ | 3,357,510 | $ | 3,357,510 | $ | 6,922,888 | $ | 6,922,888 | $ | 4,896,518 | $ | 4,896,518 | ||||||||||||||||||||||||
Restricted Cash | 1,565,841 | 1,565,841 | 1,918,606 | 1,918,606 | 2,059,028 | 2,059,028 | ||||||||||||||||||||||||||||||
Accounts receivable, net | 489,464 | 489,464 | 617,843 | 617,843 | 1,146,705 | 1,146,705 | ||||||||||||||||||||||||||||||
Deferred financing costs, current | 191,566 | 191,566 | 217,075 | 217,075 | 25,509 | 25,509 | ||||||||||||||||||||||||||||||
Prepaid expenses | 302,291 | 302,291 | 281,027 | 281,027 | 215,885 | 215,885 | ||||||||||||||||||||||||||||||
Deferred charges, current | 3,316,535 | (2,312,753 | )(1) | 5,629,288 | 3,342,608 | (3,985,002 | )(1) | 7,327,610 | 2,700,504 | (6,085,844 | )(1) | 8,786,348 | ||||||||||||||||||||||||
Total Current Assets | 9,223,207 | (2,312,753 | ) | 11,535,960 | 13,300,047 | (3,985,002 | ) | 17,285,049 | 11,044,149 | (6,085,844 | ) | 17,129,993 | ||||||||||||||||||||||||
PROPERTY AND EQUIPMENT, net | 242,927 | 242,927 | 753,251 | 753,251 | 852,705 | 852,705 | ||||||||||||||||||||||||||||||
DEFERRED FINANCING COSTS, net of current portion | 47,892 | 47,892 | 25,509 | 25,509 | 19,132 | 19,132 | ||||||||||||||||||||||||||||||
DEFERRED CHARGES, net of current portion | 609,904 | 609,904 | 627,058 | 627,058 | 510,252 | 510,252 | ||||||||||||||||||||||||||||||
OTHER ASSETS | 67,605 | 67,605 | 109,903 | 109,903 | 110,028 | 110,028 | ||||||||||||||||||||||||||||||
Total Assets | $ | 10,191,535 | $ | (2,312,753 | ) | $ | 12,504,288 | $ | 14,815,768 | $ | (3,985,002 | ) | $ | 18,800,770 | $ | 12,536,266 | $ | (6,085,844 | ) | $ | 18,622,110 | |||||||||||||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||||||||||||||||||||||||||||||
CURRENT LIABILITIES: | ||||||||||||||||||||||||||||||||||||
Accounts payable | $ | 4,893,186 | $ | 4,893,186 | $ | 5,697,170 | $ | 5,697,170 | $ | 6,281,488 | $ | 6,281,488 | ||||||||||||||||||||||||
Accrued expenses | 862,023 | 862,023 | 498,598 | 498,598 | 1,446,760 | 1,446,760 | ||||||||||||||||||||||||||||||
Deferred revenue, current | 9,662,030 | 9,662,030 | 10,285,308 | 10,285,308 | 10,112,645 | 10,112,645 | ||||||||||||||||||||||||||||||
Capital lease obligations, current | 9,410 | 9,410 | 56,886 | 56,886 | 90,992 | 90,992 | ||||||||||||||||||||||||||||||
Total Current Liabilities | 15,426,649 | 15,426,649 | 16,537,962 | 16,537,962 | 17,931,885 | 17,931,885 | ||||||||||||||||||||||||||||||
DEFFERRED RENT | 65,938 | 65,938 | 147,835 | 147,835 | 254,197 | 254,197 | ||||||||||||||||||||||||||||||
DEFERRED REVENUE, less current portion | 1,117,116 | 1,117,116 | 1,334,452 | 1,334,452 | 1,968,789 | 1,968,789 | ||||||||||||||||||||||||||||||
CONVERTIBLE NOTES PAYABLE, net of discount | 1,593,000 | 1,593,000 | 5,808,629 | 5,808,629 | 4,242,500 | 4,242,500 | ||||||||||||||||||||||||||||||
CAPITAL LEASE OBLIGATION, less current portion | 9,708 | 9,708 | 129,047 | 129,047 | 137,536 | 137,536 | ||||||||||||||||||||||||||||||
Total Liabilities | 18,212,411 | 18,212,411 | 23,957,925 | 23,957,925 | 24,534,907 | 24,534,907 | ||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' DEFICIT: | ||||||||||||||||||||||||||||||||||||
Common stock | 16,595,314 | 16,595,314 | 16,760,914 | 16,760,914 | 27,024 | 27,024 | ||||||||||||||||||||||||||||||
Additional paid-in capital | 21,349,026 | 4,860,538 | 16,488,488 | 27,418,391 | 8,663,608 | 18,754,783 | 53,435,734 | 13,806,792 | 39,628,942 | |||||||||||||||||||||||||||
Accumulated deficit | (45,965,216 | ) | (7,173,291 | ) | (38,791,925 | ) | (53,321,462 | ) | (12,648,610 | ) | (40,672,852 | ) | (65,461,399 | ) | (19,892,636 | ) | (45,568,763 | ) | ||||||||||||||||||
Total Stockholders' Deficit | (8,020,876 | ) | (2,312,753 | ) | (5,708,123 | ) | (9,142,157 | ) | (3,985,002 | ) | (5,157,155 | ) | (11,998,641 | ) | (6,085,844 | ) | (5,912,797 | ) | ||||||||||||||||||
Total Liabilities and Stockholders' Deficit | $ | 10,191,535 | $ | (2,312,753 | ) | $ | 12,504,288 | $ | 14,815,768 | $ | (3,985,002 | ) | $ | 18,800,770 | $ | 12,536,266 | $ | (6,085,844 | ) | $ | 18,622,110 |
(1) | Decrease is a result of expensing direct-response advertising costs as incurred rather than capitalizing and amortizing them under ASC 340-20. |
3
For the Year Ended | ||||||||||||
December 31, 2009 | ||||||||||||
Restated | Adjustments | As Filed | ||||||||||
REVENUES: | ||||||||||||
Net sales | $ | 18,841,893 | $ | 18,841,893 | ||||||||
COST OF GOODS SOLD | 4,182,462 | 4,182,462 | ||||||||||
GROSS PROFIT | 14,659,431 | 14,659,431 | ||||||||||
OPERATING EXPENSES: | ||||||||||||
Media and marketing services | 22,343,333 | 9,261,824 | (1) | 13,081,509 | ||||||||
Product development | 1,851,931 | 1,851,931 | ||||||||||
Selling, general and administrative | 6,566,661 | 6,566,661 | ||||||||||
Investor relations and other related consulting | 2,473,345 | (730,443 | )(2) | 3,203,788 | ||||||||
Depreciation and amortization | 37,117 | 37,117 | ||||||||||
Total Operating Expenses | 33,272,387 | 8,531,381 | 24,741,006 | |||||||||
INCOME/LOSS FROM OPERATIONS | (18,612,956 | ) | (8,531,381 | ) | (10,081,575 | ) | ||||||
OTHER (INCOME)/EXPENSE: | ||||||||||||
Change in the value of derivative liabilities | (109,058 | ) | (109,058 | ) | ||||||||
Interest expense | 2,371,724 | (1,358,090 | )(2) | 3,729,814 | ||||||||
Total Other (Income)/Expenses | 2,262,666 | (1,358,090 | ) | 3,620,756 | ||||||||
LOSS BEFORE INCOME TAX EXPENSE | (20,875,622 | ) | (7,173,291 | ) | (13,702,331 | ) | ||||||
INCOME TAX EXPENSE | 800 | 800 | ||||||||||
NET LOSS | $ | (20,876,422 | ) | $ | (7,173,291 | ) | $ | (13,703,131 | ) | |||
Basic and fully diluted net loss per share | $ | (0.95 | ) | $ | (0.33 | ) | $ | (0.63 | ) | |||
Weighted Average Shares Outstanding: | ||||||||||||
Basic and fully diluted | 21,890,656 | 21,890,656 |
(1) | Increase of $2.3 million is a result of expensing direct-response advertising costs as incurred rather than capitalizing and amortizing them under ASC 340-20 and increase of $7.0 is a result of reclassifying and revaluing warrants. |
(2) | Decrease is a result of reclassifying and revaluing warrants. |
4
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||
September 30, 2009 | September 30, 2009 | |||||||||||||||||||||||
Restated | Adjustments | As Filed | Restated | Adjustments | As Filed | |||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||
Net sales | $ | 4,427,404 | $ | 4,427,404 | $ | 11,305,678 | $ | 11,305,678 | ||||||||||||||||
COST OF GOODS SOLD | 1,018,370 | 1,018,370 | 2,451,398 | 2,451,398 | ||||||||||||||||||||
GROSS PROFIT | 3,409,034 | 3,409,034 | 8,854,280 | 8,854,280 | ||||||||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||||||
Media and marketing services | 4,565,758 | 1,020,617 | (1) | 3,545,141 | 13,246,407 | 2,549,265 | (1) | 10,697,142 | ||||||||||||||||
Product development | 464,761 | 464,761 | 1,129,995 | 1,129,995 | ||||||||||||||||||||
Selling, general and administrative | 1,612,330 | 1,612,330 | 4,429,880 | 4,429,882 | ||||||||||||||||||||
Investor relations and other related consulting | 515,993 | 25,716 | (1) | 490,277 | 2,046,696 | (1,009,790 | )(1) | 3,056,486 | ||||||||||||||||
Depreciation and amortization | 8,980 | 8,980 | 29,076 | 29,076 | ||||||||||||||||||||
Total Operating Expenses | 7,167,822 | 1,046,333 | 6,121,489 | 20,882,054 | 1,539,475 | 19,342,581 | ||||||||||||||||||
INCOME/LOSS FROM OPERATIONS | (3,758,788 | ) | (1,046,333 | ) | (2,712,455 | ) | (12,027,774 | ) | (1,539,475 | ) | (10,488,301 | ) | ||||||||||||
OTHER (INCOME)/EXPENSE: | ||||||||||||||||||||||||
Change in the value of derivative liabilities | - | - | (109,058 | ) | (109,058 | ) | ||||||||||||||||||
Interest expense | 445,458 | (397,638 | )(1) | 843,096 | 2,164,189 | (644,337 | )(1) | 2,808,526 | ||||||||||||||||
Total Other (Income)/Expenses | 445,458 | (397,638 | ) | 843,096 | 2,055,131 | (644,337 | ) | 2,699,468 | ||||||||||||||||
LOSS BEFORE INCOME TAX EXPENSE | (4,204,246 | ) | (648,695 | ) | (3,555,551 | ) | (14,082,905 | ) | (895,138 | ) | (13,187,769 | ) | ||||||||||||
INCOME TAX EXPENSE | 200 | 200 | 600 | 600 | ||||||||||||||||||||
NET LOSS | $ | (4,204,446 | ) | $ | (648,695 | ) | $ | (3,555,751 | ) | $ | (14,083,505 | ) | $ | (895,138 | ) | $ | (13,188,369 | ) | ||||||
Basic and fully diluted net loss per share | $ | (0.18 | ) | $ | (0.03 | ) | $ | (0.15 | ) | $ | (0.51 | ) | $ | 0.13 | $ | (0.64 | ) | |||||||
Weighted Average Shares Outstanding: | ||||||||||||||||||||||||
Basic and fully diluted | 23,619,718 | 23,619,718 | 20,688,198 | 20,688,198 |
(1) | Adjustment is a result of reclassifying and revaluing warrants. |
5
For the Three Months Ended | For the Six Months Ended | For the Three Months Ended | For the Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
June 30, 2010 | June 30, 2010 | June 30, 2009 | June 30, 2009 | |||||||||||||||||||||||||||||||||||||||||||||
Restated | Adjustments | As Filed | Restated | Adjustments | As Filed | Restated | Adjustments | As Filed | Restated | Adjustments | As Filed | |||||||||||||||||||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||||||||||||||||||||||||
Net sales | $ | 9,712,586 | $ | 9,712,586 | $ | 19,189,916 | $ | 19,189,916 | $ | 3,686,644 | $ | 3,686,644 | $ | 6,878,274 | $ | 6,878,274 | ||||||||||||||||||||||||||||||||
COST OF GOODS SOLD | 4,013,801 | 4,013,801 | 7,168,851 | 7,168,851 | 753,324 | 753,324 | 1,433,028 | 1,433,028 | ||||||||||||||||||||||||||||||||||||||||
GROSS PROFIT | 5,698,785 | 5,698,785 | 12,021,065 | 12,021,065 | 2,933,320 | 2,933,320 | 5,445,246 | 5,445,246 | ||||||||||||||||||||||||||||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||||||||||||||||||||||||||||||
Media and marketing services | 12,107,101 | 8,699,862 | (1) | 3,407,239 | 21,751,631 | 15,276,499 | (2) | 6,475,132 | 4,186,055 | 777,748 | (3) | 3,408,307 | 8,680,649 | 1,528,648 | (3) | 7,152,001 | ||||||||||||||||||||||||||||||||
Product development | 963,392 | 963,392 | 1,715,519 | 1,715,519 | 365,497 | 365,497 | 665,234 | 665,234 | ||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 3,722,377 | 3,722,377 | 6,599,590 | 6,599,590 | 1,565,995 | 1,565,995 | 2,817,552 | 2,817,552 | ||||||||||||||||||||||||||||||||||||||||
Investor relations and other related consulting | - | - | 165,045 | - | 165,045 | 918,825 | (427,382 | )(3) | 1,346,207 | 1,425,470 | (1,140,739 | )(3) | 2,566,209 | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | 54,903 | 54,903 | 75,145 | 75,145 | 9,760 | 9,760 | 20,096 | 20,096 | ||||||||||||||||||||||||||||||||||||||||
Total Operating Expenses | 16,847,773 | 8,699,862 | 8,147,911 | 30,306,930 | 15,276,499 | 15,030,431 | 7,046,132 | 350,366 | 6,695,766 | 13,609,001 | 387,909 | 13,221,092 | ||||||||||||||||||||||||||||||||||||
INCOME/LOSS FROM OPERATIONS | (11,148,988 | ) | (8,699,862 | ) | (2,449,126 | ) | (18,285,865 | ) | (15,276,499 | ) | (3,009,366 | ) | (4,112,812 | ) | (350,366 | ) | (3,762,446 | ) | (8,163,755 | ) | (387,909 | ) | (7,775,846 | ) | ||||||||||||||||||||||||
OTHER (INCOME)/EXPENSE: | ||||||||||||||||||||||||||||||||||||||||||||||||
Change in the value of derivative liabilities | - | - | - | - | (109,058 | ) | (109,058 | ) | ||||||||||||||||||||||||||||||||||||||||
Interest expense | 990,749 | (1,455,836 | )(3) | 2,446,585 | 1,209,917 | (2,557,155 | )(3) | 3,767,072 | 841,838 | (211,083 | )(3) | 1,052,921 | 1,718,732 | (246,698 | )(3) | 1,965,430 | ||||||||||||||||||||||||||||||||
Total Other (Income)/Expenses | 990,749 | (1,455,836 | ) | 2,446,585 | 1,209,917 | (2,557,155 | ) | 3,767,072 | 841,838 | (211,083 | ) | 1,052,921 | 1,609,674 | (246,698 | ) | 1,856,372 | ||||||||||||||||||||||||||||||||
LOSS BEFORE INCOME TAX EXPENSE | (12,139,737 | ) | (7,244,026 | ) | (4,895,711 | ) | (19,495,782 | ) | (12,719,344 | ) | (6,776,438 | ) | (4,954,650 | ) | (139,283 | ) | (4,815,367 | ) | (9,773,429 | ) | (141,211 | ) | (9,632,218 | ) | ||||||||||||||||||||||||
INCOME TAX EXPENSE | 200 | 200 | 400 | 400 | 200 | 200 | 400 | 400 | ||||||||||||||||||||||||||||||||||||||||
NET LOSS | $ | (12,139,937 | ) | $ | (7,244,026 | ) | $ | (4,895,911 | ) | $ | (19,496,182 | ) | $ | (12,719,344 | ) | $ | (6,776,838 | ) | $ | (4,954,850 | ) | $ | (139,283 | ) | $ | (4,815,567 | ) | $ | (9,773,829 | ) | $ | (141,211 | ) | $ | (9,632,618 | ) | ||||||||||||
Basic and fully diluted net loss per share | $ | (0.46 | ) | $ | (0.27 | ) | $ | (0.19 | ) | $ | (0.75 | ) | $ | (0.49 | ) | $ | (0.26 | ) | $ | (0.24 | ) | $ | (0.01 | ) | $ | (0.24 | ) | $ | (0.51 | ) | $ | (0.04 | ) | $ | (0.47 | ) | ||||||||||||
Weighted Average Shares Outstanding: | ||||||||||||||||||||||||||||||||||||||||||||||||
Basic and fully diluted | 26,427,048 | 26,427,048 | 26,094,502 | 26,094,502 | 20,392,487 | 20,392,487 | 20,688,198 | 20,688,198 |
(1) | Increase of $2.1 million is a result of expensing direct-response advertising costs as incurred rather than capitalizing and amortizing them under ASC 340-20 and increase of $6.6 is a result of reclassifying and revaluing warrants. |
(2) | Increase of $3.8 million is a result of expensing direct-response advertising costs as incurred rather than capitalizing and amortizing them under ASC 340-20 and increase of $11.5 is a result of reclassifying and revaluing warrants. |
(3) | Adjustment is a result of reclassifying and revaluing warrants. |
6
For the Three Months Ended | For the Three Months Ended | |||||||||||||||||||||||
March 31, 2010 | March 31, 2009 | |||||||||||||||||||||||
Restated | Adjustments | As Filed | Restated | Adjustments | As Filed | |||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||
Net sales | $ | 9,477,330 | $ | 9,477,330 | $ | 3,191,630 | $ | 3,191,630 | ||||||||||||||||
COST OF GOODS SOLD | 3,155,050 | 3,155,050 | 679,704 | 679,704 | ||||||||||||||||||||
GROSS PROFIT | 6,322,280 | 6,322,280 | 2,511,926 | 2,511,926 | ||||||||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||||||
Media and marketing services | 9,644,531 | 6,576,638 | (1) | 3,067,893 | 4,494,595 | 750,901 | (2) | 3,743,694 | ||||||||||||||||
Product development | 752,127 | 752,127 | 299,737 | 299,737 | ||||||||||||||||||||
Selling, general and administrative | 2,877,213 | 2,877,213 | 1,251,557 | 1,251,557 | ||||||||||||||||||||
Investor relations and other related consulting | 165,045 | 165,045 | 506,644 | 1,220,002 | ||||||||||||||||||||
Depreciation and amortization | 20,242 | 20,242 | 10,336 | 10,336 | ||||||||||||||||||||
Total Operating Expenses | 13,459,158 | 6,576,638 | 6,882,520 | 6,562,869 | 750,901 | 6,525,326 | ||||||||||||||||||
INCOME/LOSS FROM OPERATIONS | (7,136,878 | ) | (6,576,638 | ) | (560,240 | ) | (4,050,943 | ) | (750,901 | ) | (4,013,400 | ) | ||||||||||||
OTHER (INCOME)/EXPENSE: | ||||||||||||||||||||||||
Change in the value of derivative liabilities | - | - | (109,058 | ) | (109,058 | ) | ||||||||||||||||||
Interest expense | 219,169 | (1,101,318 | )(2) | 1,320,487 | 876,894 | (35,615 | )(2) | 912,509 | ||||||||||||||||
Total Other (Income)/Expenses | 219,169 | (1,101,318 | ) | 1,320,487 | 767,836 | (35,615 | ) | 803,451 | ||||||||||||||||
LOSS BEFORE INCOME TAX EXPENSE | (7,356,047 | ) | (5,475,320 | ) | (1,880,727 | ) | (4,818,779 | ) | (715,286 | ) | (4,816,851 | ) | ||||||||||||
INCOME TAX EXPENSE | 200 | 200 | 200 | 200 | ||||||||||||||||||||
NET LOSS | $ | (7,356,247 | ) | $ | (5,475,320 | ) | $ | (1,880,927 | ) | $ | (4,818,979 | ) | $ | (715,286 | ) | $ | (4,817,051 | ) | ||||||
Basic and fully diluted net loss per share | $ | (0.29 | ) | $ | (0.21 | ) | $ | (0.07 | ) | $ | (0.27 | ) | $ | (0.00 | ) | $ | (0.27 | ) | ||||||
Weighted Average Shares Outstanding: | ||||||||||||||||||||||||
Basic and fully diluted | 25,758,260 | 25,758,260 | 17,990,516 | 17,990,516 |
(1) | Increase of $1.7 million is a result of expensing direct-response advertising costs as incurred rather than capitalizing and amortizing them under ASC 340-20 and increase of $4.9 is a result of reclassifying and revaluing warrants. |
(2) | Adjustment is a result of reclassifying and revaluing warrants. |
7
The Registrant’s Audit Committee and Chief Financial Officer are assessing the effect of the restatements on the Registrant’s internal control over financial reporting and its disclosure controls and procedures. The Registrant’s Audit Committee and Chief Financial Officer will not reach a final conclusion on the effect of the restatements on internal control over financial reporting and disclosure controls and procedures until completion of the restatement process.
The Registrant's Audit Committee and Chief Financial Officer have discussed the matters disclosed in this filing with Grant Thornton LLP.
Item 9.01 Financial Statements and Exhibits
None
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: November 22, 2010
CYBERDEFENDER CORPORATION | |||
By: | /s/ Kevin Harris | ||
Kevin Harris, Chief Financial Officer |