Let me relate a story to show how a small financial misstatement can impact a company and it’s executives in the US and why the current management is being so careful. Due to SEC regulations the CEO and CFO have to certify the quarterly and annual reports, see the last pages of these filings. I suspect that as John and David were asked to sign off on the last quarters report they became aware of the questionable past statements. Now on with the story, I have a good friend that co-founded a small public company that grew to about a $420MM market cap. They provided sterilization services of surgical gowns and instruments to hospitals and medical facilities. They would pick up the used linen and instruments from the medical facility and bring them back to their plants for sterilization then return the gowns, drapes and instruments to the medical facility. On the last day of one quarter they processed a hospitals supplies and delivered them back to the hospital before mid-night however, the hospital did not sign for receipt until the next day which was the first day of the next quarter. My friends company booked the revenue from that shipment in the prior quarter when it was delivered, but not accepted. It was wrong and due to poor revenue recognition standards. They discovered the error corrected the mistake and admitted fault. The shipment in questions was worth less than $10,000. The result was a SEC investigation an immediate decline of over $100MM market cap and my friend the Sr. EVP and the President were barred from ever being an officer or director of a public company again. So what UNIS is looking at may not be a big deal. If anyone wants to check the original company was SRI Surgical later acquired by Synergy Health that was recently acquired by Steris.
UNS Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
