This excerpt taken from the VRSN 8-K filed Nov 21, 2006.
ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT REPORT OR COMPLETED INTERIM REVIEW.
VeriSign, Inc. (VeriSign) today announced that that it will restate its historical financial statements. As previously announced, an ad hoc group of independent Directors of VeriSigns Board of Directors has been reviewing VeriSigns historical stock option grant practices. Although the review is not complete, on November 15, 2006, the Board concluded that the company must restate its historical financial statements for the years and interim periods from 2001-2005 and for the first quarter of 2006 to record additional non-cash, stock-based compensation expense related to past stock option grants having incorrect measurement dates and other administrative inconsistencies related to certain stock option grant dates and prices. Based on the findings to date, the non-cash charge to the financial statements for the periods 2001-2005 is not expected to exceed $250 million, however the investigation is still on-going.
Accordingly, the financial statements and all earnings press releases and similar communications issued by the company relating to those periods should not be relied upon pending completion of the restatements. The amount of additional non-cash stock-based compensation expense to be recorded in any specific period or in any future period and the resulting tax and accounting impact have not been determined.
The ad hoc group of independent Directors anticipates its review of VeriSigns historical stock option grant practices will be completed by the end of the year. As soon as practicable following the completion of the review, VeriSign intends to prepare restated financial statements for all affected periods and thereafter become current on the filing of its periodic reports required under the Securities Exchange Act of 1934, as amended. VeriSign is evaluating the impact of this matter on its internal controls over financial reporting and on its disclosure controls and procedures.
VeriSign has discussed the above matters with KPMG LLP, the Companys independent registered public accounting firm.
The press release issued by VeriSign on November 21, 2006 in connection with this matter is attached hereto as Exhibit 99.1