SST Announces Restatement Related to Stock-Based Compensation
Silicon Storage Technology, Inc. (Nasdaq: SSTI) today announced that it expects to restate its previously-issued financial statements for the fiscal years 1997 through 2005 and for the quarters ended March 31, 2006, June 30, 2006 and September 30, 2006 to correct errors related to accounting for stock-based compensation expense.
As previously announced on March 15, 2007, SST is conducting a voluntary review of its historical stock option grant practices covering the time from SSTís initial public offering in 1995 through the current fiscal year. The chairman of the audit committee of the board of directors is conducting this review with the assistance of independent outside counsel and outside accounting experts. The chairmanís review has found instances of the use of incorrect measurement dates for certain option grants.
At this time, the chairman has not completed the forensic review of the option grants and the financial impact of using incorrect measurement dates has not been finalized. However, the chairman has reached a preliminary conclusion that SST will need to restate its historical financial statements to record additional non-cash stock-based compensation expense related to stock option grants as a result of errors in recording the measurement date for certain stock option grants. Accordingly, SST advises that all of its financial statements and related communications for periods commencing on or after January 1, 1997 should not be relied upon.
The stock-based compensation charges incurred will have the effect of decreasing reported net income or increasing reported loss from operations and decreasing the reported retained earnings figures contained in SSTís historical financial statements for the periods noted above. SST does not expect that the anticipated restatements will have any impact on its historical revenues or cash position for any period. SSTís independent registered public accounting firm has not completed its review of the findings of the chairmanís review.
SST intends to file its restated financial statements and its delinquent Annual Report for the year ended December 31, 2006 and delinquent Quarterly Report for the quarter ended March 31, 2007 as soon as practicable.
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