Company Delays Filing of 10-K report, Dismisses Auditors
HONG KONG and LOS ANGELES, April 7, 2011 /PRNewswire-Asia/ -- Artificial Life, Inc., (OTC BB: ALIF), a leading provider of award-winning mobile technology and applications (the "Company") announced the dismissal of its audit firm and the related delayed filing of its 10-K report. The Company also issued earnings guidance for its expected fiscal year 2010 results.
Termination of Independent Accountants
The Company (ALIF) announced the dismissal of its auditors KPMG. KPMG was engaged to audit the financial statements for the year ended December 31, 2010. The Company and KPMG had agreed that the completion date of the audit would be March 22, 2011. On March 18, 2011, it became apparent that the schedule could not be met by KPMG and the independent audit committee of the Company dismissed KPMG on March 18, 2011 with notice effective March 30, 2011 to still allow KPMG to complete the audit. However, KPMG did also not manage to complete the audit on or prior to the effective date.
After the notice of dismissal was communicated to KPMG, the parties engaged in discussions including the possibility that KPMG's engagement could be extended so the audit could still be completed within the timeframe of the extension provided by the filed Form 12b-25, which was filed on April 1, 2011, as described below. Such discussions continued until April 5, 2011. Therefore, the Company filed a Form 8-K relating to the dismissal of KPMG on April 6, 2011.
Notification of Late Filing
On April 1, 2011, the Company filed a Form 12b-25, Notification of Late Filing, with the Securities and Exchange Commission (the "SEC") with regard to its Annual Report on Form 10-K for the year ended December 31, 2010. At the time of the filing, the Company anticipated and expected that it would still be in position to file its Form 10-K with the SEC within the fifteen day time extension period provided in the Form 12b-25.
However, as the Company has dismissed KPMG and is now in the process of engaging a new independent registered public accounting firm to audit its financial statements for the Fiscal Year 2010, the Company has to assume that it may not be able to file its Form 10-K within the fifteen day extension period. Therefore, the Company filed on April 6, 2011 an amendment to its initial Form 12b-25 filing.
The Company will file its 2010 10-K as soon as its audit has been completed.
Unaudited Preliminary Guidance Relating to Fiscal Year Ended 2010
Due to the delayed filing, the Company today issued guidance for its fiscal year 2010 anticipated earnings based on its current unaudited results as follows:
For the fiscal year 2010, management of the Company anticipates revenues to be in the range of $40,000,000 to $42,000,000 as compared to $27,454,474 for the year ended December 31, 2009; income from operations is expected to be in the range of $12,000,000 to $14,000,000 as compared to income from operations of $6,125,050 for the year ended December 31, 2009; net income is expected to be in the range of $10,000,000 to $12,000,000 as compared to $7,568,719 for the year ended December 31, 2009; basic and diluted net income per share is expected to be in the range of $0.19 to $0.21, as compared to $0.15 for the basic and diluted net income per share for the year ended December 31, 2009.
The above described unaudited financial guidance is based on assessments and information currently available to management and based on assumptions and assessments which they deem reasonable. Any of such preliminary unaudited results are subject to potential substantial change or adjustment pending the completion of the Company's audit for the year ended December 31, 2010. As explained above, the Company is presently in the process of identifying an independent auditor to complete the audit of its 2010 results and will file audited results as part of its Form 10-K at such time as the audit has been completed.
Current and potential investors are cautioned that any preliminary unaudited results may still change and that they should not place undue reliance upon them. As set forth in the Company's Form 8-K filing, filed April 6, 2011 regarding the termination of the engagement of KPMG as disclosed above, there were still some unresolved accounting issues at the time that KPMG's engagement was terminated.
About Artificial Life, Inc.
Artificial Life, Inc. has been a pioneer in artificial intelligence and mobile technology since its inception in Boston in 1994. We are a public US corporation (OTC BB: ALIF ) with listing on the Frankfurt Stock Exchange (Frankfurt: AIF.F; Xetra: AIF.DE) and headquarters and production center in Hong Kong. We have additional offices in Berlin, Germany (EMEA headquarters) and Tokyo, Japan and Santa Monica, USA. Currently our main business areas are: high quality (3D) interactive (massive multiplayer) mobile games, mobile participation television, mobile business applications, our powerful mobile commerce technology platform OPUS-M™ and our green IT solutions provided by Green Cortex, Inc. We have won many industry awards for our outstanding technology and products.
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Forward-Looking Statements:
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements regarding our future results of operations, financial condition and business prospects. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "intend", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue" or the negative of these terms or other comparable terminology. Although such statements are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on them. These statements involve risks and uncertainties, and actual market trends or our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward looking statements for a variety of reasons. Potential risks and uncertainties include, but are not limited to, our ability to obtain additional funding to operate and grow our business; the unproven potential of our mobile gaming business model; changing consumer preferences and uncertainty of market acceptance of our products; timely adoption and availability of 3G mobile technology; market acceptance for use of mobile handheld devices to play the interactive games; unpredictable mobile game development schedules; our reliance on a relatively small number of brands; our ability to license brands from others; our dependence upon resellers and telecommunication carriers and operators to distribute our products; our ability to successfully develop, introduce, and sell new or enhanced products in a timely manner; and the timing of new product announcements or introductions by us or by our competitors. For additional discussion of these risks and uncertainties and other factors, please see the documents we file from time to time with the Securities and Exchange Commission, including our Annual Report on Form 10-KSB filed on March 16, 2010. We assume no obligation to update any forward-looking statements, which apply only as of the date of this press release.
For more information on ARTIFICIAL LIFE, INC., please contact:
Artificial Life IR and PR Contact:
Adeline Law
Tel: +852-3102-2800
ir@artificial-life.com
