UNITED STATES
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): August 16, 2005
DEBT RESOLVE, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 33-0889197
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
0-29525
(Commission File Number)
707 Westchester Avenue, Suite L7
White Plains, New York 10604
(Address of principal executive offices)
Registrant's telephone number, including area code: (914) 949-5500
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 DFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4 (c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 4.02. NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A
RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW.
Debt Resolve, Inc., ("the Company") and its audit committee concluded
on August 16, 2005 that Debt Resolve will restate previously issued financial
statements for the years ended December 31, 2003 and December 31, 2004, and the
quarter ended March 31, 2005. The restatement adjustments are needed primarily
to correct Debt Resolve's historical accounting for stock-based compensation to
consultants and advisory board members in the three accounting periods, as well
as to revise an entry charging offering expenses to additional paid-in capital
during the quarter ended March 31, 2005.
In conjunction with the re-audit of Debt Resolve's financial statements
for the years ended December 31, 2003 and December 31, 2004 and a review of the
quarter ended March 31, 2005 by Marcum & Kliegman, LLP, the Company's
independent registered public accounting firm as of June 20, 2005, Debt Resolve
determined that adjustments were necessary to recognize the cumulative impact of
correcting its computation for stock-based compensation to consultants and
advisory board members. Specifically, it was determined that Debt Resolve should
have recorded an expense for stock-based compensation to consultants and
advisory board members during those accounting periods. The Company had
disclosed these costs on a pro forma basis, only. Based on the revision of its
method of accounting for stock-based compensation to these persons, Debt Resolve
will restate the periods impacted by these adjustments.
As a result of the restatement adjustments, Debt Resolve's previously
issued consolidated financial statements, including those contained in the
following filings, should no longer be relied upon: Annual Reports on Form
10-KSB for the fiscal years ended December 31, 2003 and December 31, 2004; and
Quarterly Reports on Form 10-QSB for the quarters ended March 31, 2003, June 30,
2003, September 30, 2003, March 31, 2004, June 30, 2004, September 30, 2004 and
March 31, 2005. While the Company's Form 10-QSB for the quarter ended June 30,
2005 will reflect the necessary adjustments for the period then ended, the
Company has filed a Form 12b-25 with the SEC providing for an extension of time
to file its Form 10-QSB.
The restatement adjustments related to computation for stock-based
compensation to consultants and advisory board members are anticipated to
increase net loss by $31,756 for the year ended December 31, 2004 and increase
net loss by $109,491 for the year ended December 31, 2003. In addition, these
adjustments and the described adjustment to an entry recording offering expenses
are anticipated to increase net loss for the quarter ended March 31, 2005 by
$97,136.
Pursuant to this Item 4.02, the Company's management and audit
committee have discussed the matters disclosed in this Form 8-K with the
Company's independent registered public accounting firm, Marcum & Kliegman LLP.
The discussion of the Company's revised financial results contained in this Form
8-K has been prepared by management and represents management's preliminary
assessment of the revised results. These results are subject to change as the
Company's independent registered public accounting firm completes its review.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DEBT RESOLVE, INC.
Date: August 22, 2005 By: /s/ Katherine A. Dering
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Katherine A. Dering
Chief Financial Officer