This excerpt taken from the OWW 10-K filed Mar 11, 2009.
We have identified significant deficiencies in our internal control over financial reporting.
In connection with the audit of our consolidated financial statements for the year ended December 31, 2008, we were required to make an assessment of the effectiveness of our internal control over financial reporting. Although our auditors and we did not identify any matters constituting material weaknesses under the standards established by the Public Company Accounting Oversight Board (United States) (PCAOB), our auditors and we have identified certain matters involving our internal control over financial reporting that constitute significant deficiencies.
The PCAOB defines a material weakness as a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting.
The significant deficiencies identified result from inconsistent application of controls related to the reconciliation of certain accounts at our HotelClub subsidiary. Although we are in the process of developing and implementing a remediation plan to address these deficiencies and believe they will be remediated, additional measures may be necessary, and the measures we expect to take to improve these deficiencies may not be sufficient to address the issues identified.
Prior to the assessment performed in connection with the audit of our consolidated financial statements for the year ended December 31, 2008, we had identified several material weaknesses in our internal control over financial reporting. Although our auditors and we believe that we have addressed the material weaknesses, the measures we have taken may not be effective, and we may not be able to maintain effective internal control over financial reporting in the future. As a result, there can be no assurance that we will not identify other material weaknesses or additional significant deficiencies in the future.
If we are unable to correct the identified deficiencies in our internal controls in a timely manner, or if we identify other material weaknesses or deficiencies in the future, our ability to record, process, summarize and report financial information accurately and within the time periods specified in the rules and forms of the SEC would be adversely affected. This failure could negatively affect the market price and trading liquidity of our common stock, cause investors to lose confidence in our reported financial information, subject us to civil and criminal investigations and penalties, and adversely impact our business and financial condition.