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Conversion Services International Announces Adjustment of Financial Statements Related to the Purchase Accounting of its 2004 Acquisitions
EAST HANOVER, N.J., April 12, 2005 -- Conversion Services International, Inc. (OTC Bulletin Board: CSII; "CSI"), a premier professional services firm exclusively focused on delivering the value in strategic consulting, business intelligence, data warehousing and data management solutions to Global 2000 organizations and other businesses, today announced that it will restate the manner in which CSI initially recorded, and subsequently accounted for, the acquisitions of DeLeeuw Associates, Inc. in March 2004 and Evoke Software Corporation in June 2004.
Following discussions with the Securities and Exchange Commission (the "SEC"), CSI's Quarterly Reports on Form 10-QSB and the financial statements contained therein will be restated for the quarters ended March 31, 2004, June 30, 2004 and September 30, 2004. These adjustments have no impact on revenues or on any cash items.
This decision was prompted by comments received from the SEC in connection with its review of CSI's Registration Statement on Form SB-2. The determination to change CSI's purchase accounting for the DeLeeuw Associates and Evoke Software transactions was made by the Board of Directors of CSI upon the recommendation of management and was discussed with CSI's independent registered public accounting firm, Friedman LLP. Additional information can be found in the Company's Current Report on Form 8-K and its three amended Quarterly Reports on Form 10-QSB for the quarters ended March 31, 2004, June 30, 2004 and September 30, 2004 being filed with the SEC today.
Management has determined that the matters discussed above, among other factors, constitute a material weakness in CSI's disclosure controls and procedures. The material weakness, management's conclusion as to the effectiveness of the Company's disclosure controls and procedures and management's plan to remedy this weakness will be disclosed in Item 8A of Part II of the Company's Annual Report on 10-KSB.
Scott Newman, CSI's President, Chief Executive Officer and Chairman, stated, "CSI has always been proud of its management's integrity in producing accurate financial statements. The restatement results from the purchase accounting treatment for the DeLeeuw Associates and Evoke Software acquisitions, and does not adversely affect our financial condition on a cash basis."
About Conversion Services International, Inc.
A Note on Forward-Looking Statements
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