Ann: GENERAL: DIL: Diligent Board Member Services

• Release Date: 17/10/13 14:46
• Summary: GENERAL: DIL: Diligent Board Member Services - Update on Timing
• Price Sensitive: No
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					DIL
17/10/2013 12:46
GENERAL

REL: 1246 HRS Diligent Board Member Services INC (NS)

GENERAL: DIL: Diligent Board Member Services - Update on Timing

October 17, 2013

Diligent Board Member Services, Inc.
Update on timing for release of Restated Financial Statements and the
Preliminary Half Year Announcement

On August 6, 2013, Diligent Board Member Services, Inc. (the "Diligent")
announced that it would restate its financial statements for the fiscal years
ended December 31, 2010, 2011 and 2012 and the fiscal quarter ended March 31,
2013, and that its previously reported results for such fiscal periods and
interim periods within such fiscal years should no longer be relied upon.

NZX had previously advised Diligent that while it would not grant a waiver
from the applicable rules requiring Diligent's preliminary half year
announcement and half year report to be released in August and September,
respectively, it would take no action if Diligent would provide its
preliminary half year announcement by 28 October and its half year report by
29 December.  At this time, Diligent has determined that it will not be able
to provide its preliminary half year announcement by 28 October 2013.
Diligent cannot finalise its preliminary half year announcement and half year
report for 2013 until the restatement process is complete.  It is now
expected that this process will take up to an additional 45 days.  This means
that Diligent's preliminary half year announcement is expected to be provided
on or before 12 December 2013. NZX has indicated it does not intend to
suspend trading in Diligent's shares because of this additional delay to the
provision of Diligent's preliminary half year announcement.

To date, no new material adverse revenue recognition issues have been
discovered during the restatement process.   However, the restatement process
is very complex and time consuming and involves reviewing the recognition of
revenue for approximately 20,000 transactions over the period covered by the
restatement. As previously announced, the revenue recognition errors
identified by the Company do not affect the total revenues ultimately earned
or to be earned, or the amount or timing of cash received or to be received
from individual customer agreements.

Diligent remains focused on completing the restatement process and announcing
its restated financial statements and the preliminary half year announcement
as soon as possible.  Diligent is working with its new US independent
registered public accounting firm, Deloitte & Touche LLP to complete the
reaudit of its historical financial statements and has also engaged
additional external resources to assist with completing the restatement
process.  Alessandro Sodi, Diligent's President & Chief Executive Officer
said "completing the restatement quickly is one of the highest priorities in
the Company and the Board and management team are focused on the completion
of both the restatement and reaudit."

Forward Looking Statements

This document contains forward looking statements within the meaning of the
safe harbor provision of the Securities Litigation Reform Act of 1995. Terms
such as "expect," "believe," "continue," and "intend," as well as similar
comments, are forward looking in nature. These forward looking statements
include statements regarding the Company's intent to restate certain prior
period financial statements and the errors that resulted in the Audit
Committee reaching the decision that these historical financial statements
could no longer be relied upon. There can be no assurance that the Company's
Board of Directors, Audit Committee, management or independent registered
public accounting firm will not identify additional issues in connection with
the restatement or reaudit, or that these issues will not require additional
corrections to the Company's prior period financial statements. These
statements are subject to risks and uncertainties, including the risk that
additional information may become available in preparing and reauditing the
financial statements and may require the Company to make additional
corrections, the time and effort required to complete the restatement of the
financial statements, actions which may be taken by the NZX in respect of the
Company's continued listing, the ramifications of the Company's potential
inability to timely file periodic and other reports with the US Securities
and Exchange Commission, and the risk of litigation or governmental
investigations or proceedings relating to these matters. In addition, as
disclosed in our prior filings, our Special Committee investigation
identified a number of instances in which we were not, or may not have been,
in compliance with applicable New Zealand and US regulatory obligations and
such instances may expose us to potential regulatory actions and/or
contingent liabilities; certain of our past stock issuances and stock option
grants may expose us to potential contingent liabilities, including potential
rescission rights; we are subject to New Zealand Stock Exchange Listing Rules
and compliance with securities and financial reporting laws and regulations
in the US and New Zealand and face higher costs and compliance risks than a
typical US public company due to the need to comply with these dual
regulatory regimes; as of December 31, 2012 we identified material weaknesses
in our internal control over financial reporting and concluded that our
disclosure controls were not effective; we must address the material
weaknesses in our internal controls, which otherwise may impede our ability
to produce timely and accurate financial statements; our business is highly
competitive and we face the risk of declining customer renewals or upgrades;
and we may fail to manage our growth effectively. Please refer to Diligent's
Annual Report on Form 10K for the Fiscal Year ended December 31, 2012 filed
with the Securities and Exchange Commission for further information.

Investor inquiries:
Sonya Joyce
Phone: +64 4 894 6912

Media inquiries:
Geoff Senescall
Phone: +64 21 481 234
End CA:00242504 For:DIL    Type:GENERAL    Time:2013-10-17 12:46:05