Liberate Puts COO on Leave
By Karen Brown -- Multichannel News, 11/24/2002 7:00:00 PM
Liberate Technologies Inc.'s accounting problems may be more serious than previously reported, and that has prompted the interactive-TV provider to bench its chief operating officer.
The San Carlos, Calif.-based company acknowledged that it has placed COO Donald Fitzpatrick on leave, pending completion of an investigation into the reporting of $10 million in revenue during fiscal-year 2002 and the first fiscal quarter of 2003.
It is also withdrawing its financial guidance for the coming quarters.
The probe began in October, when Liberate's audit committee discovered questions related to $1.84 million in license-fee revenue from a transaction recorded in the fourth quarter of 2002.
The investigation, aided by independent auditor PricewaterhouseCoopers and legal firm Lantham & Watkins, widened the scope of the inquiry to include about $10 million in revenue recorded during 2002 and the first quarter of 2003, and further transactions are now being looked into, according to a company statement.
Liberate is also adjusting its economic outlook downward.
The company expects that pro forma revenues for the current quarter to be "materially below" its original guidance of $15 million to $20 million, and that its pro forma basic net loss will be "materially greater" than the original forecast of 12 cents to 16 cents per share.
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