EXHIBIT 99.1
California Software to Restate Financials
Monday, August 7, 2000 7:54 pm Eastern Time
IRVINE, Calif.-(BUSINESS WIRE)-Aug. 7, 2000-California Software
Corp. (OTCBB:CAWC - news) Monday announced it will restate its
financial statements for 1999 and for the first quarter 2000
based on recommendations from its new accounting firm, Stark
Tinter & Associates LLC.
Revenues from new products - which rehost and retool AS/400
applications - accounted for a significant portion of the
revenues reported in the company's financial statements for 1999
and the first quarter 2000.
The company had booked revenue on new products when the products
were shipped based on what the company understood were generally
accepted accounting principles. Following the company's longtime
practice, a customer who obtains software from the company is
permitted to work with it for 30 days before deciding whether to
keep or return the product.
California Software booked revenue each time software was
shipped, setting aside reserves to cover returns at a projected
50% return rate. The company's new accounting firm Stark Tinter &
Associates LLC advised the company that this procedure for
booking revenue does not comply with generally accepted
accounting principles and resulted in the company's overstating
revenues for 1999 and the first quarter 2000.
The amount of revenue that is affected will be determined based
on an audit of the company that Stark Tinter & Associates will be
undertaking shortly. New financials will be prepared based on the
audit and then the company will file amendments to the company's
Form 10-KSB for year-end 1999 and the company's Form 10-QSB for
the first quarter 2000.
``When we realized there was a problem, we moved to begin setting
it straight,'' said Bruce Acacio, CEO of California Software.
``We will do everything in our power to fix the problem as soon
as possible and then move forward growing the company to its
fullest potential.''
Because the company will be implementing new accounting
procedures, the company anticipates a delay in filing its 10-QSB
for the second quarter 2000, which is due to be filed on or
before Aug. 14, 2000. Beginning sometime during the week of Aug.
21, the company anticipates that its ticker symbol may indicate
that the company is not current with its filings.
The company anticipates that Stark Tinter & Associates LLC will
complete its audit and that the amendments to the previous SEC
filings and the filing of Form 10-QSB for the second quarter 2000
will be complete in September. California Software develops
products that facilitate the deployment of IBM Midrange
applications on PC networks.
For additional information, see www.californiasoftware.com.
Forward-looking statements in this release are made pursuant to
the ``safe harbor'' provisions of the Private Securities
Litigation Reform Act of 1994. Investors are cautioned that such
forward-looking statements involve risks and uncertainties,
including without limitation, continued acceptance of the
company's products, increased levels of competition for the
company, new products and technological changes, the company's
dependence on third-party supplies and other risks detailed from
time to time in the company's periodic reports filed with the
Securities and Exchange Commission.
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Contact:
California Software Corp., Irvine
Kate Tague, 949/553-8900 (marketing/communications)
[email protected]
www.californiasoftware.com
or
Carl Thompson Associates
Carl Thompson, 303/665-4200 (investor relations)
[email protected]
