Explanatory
Note:
This
Current Report on Form 8-K is being filed to clarify and provide additional
information relating to Innofone.com, Incorporated’s Current Report on Form 8-K
filing, dated December 29, 2006 (“Original Filing”).
ITEM
4.02. NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED AUDIT
REPORT OR COMPILED INTERIM REVIEW.
As
previously disclosed in the Original Filing, Innofone.com, Incorporated (the
“Company”) will have to restate certain of its financial statements. The Company
concluded that it will have to restate its financial statements on December
21,
2006 and notified the public that certain previously issued financial statements
should no longer be relied upon and that the Company will have to amend to
restate such financial statements contained in the following periods: (i) Form
10-KSB for the year ended June 30, 2006; and (ii) the following quarterly
reports: (a) Form 10-QSB for the quarter ended September 30, 2006; (b) Form
10-QSB for the quarter ended March 31, 2006; (c) Form 10-QSB for the quarter
ended December 31, 2005; and (d) Form 10-QSB for the quarter ended September
30,
2005 (collectively, the “Financial Statements”). The determination was made by
the Company and following consultation with the Company’s senior management,
advisors and independent registered public accounting firm. Until such time
as
the Company files the restated Financial Statements with the Commission to
address proper accounting treatment of certain items, the Financial
Statements should not be relied upon.
The
restatements of the Financial Statements relate to the accounting treatment
of
certain financing transactions; primarily the equity swap transaction between
the Company and Cogent Capital Investments, LLC and with respect to the issuance
of certain warrants to the AJW affiliates in the NIR transaction which may
change the equity swap unrealized losses and warrant expenses, potentially
affecting the net loss currently reflected in the aforementioned Financial
Statements. The
Company deems these transactions to be both complex and nonrecurring and the
Company does not know at this time the exact impact the restatements may have
on
the Financial Statements.
However,
the Company expects that the adjustments to the Financial Statements will be
non-cash in nature and will not reflect any changes in the underlying
performance of the Company’s business, including revenues, operating costs and
expenses, operating income or loss, operating cash flows or adjusted
EBITDA.
The
Company’s management has discussed with the Company’s independent registered
public accounting firm the matters disclosed in this Current Report on Form
8-K
pursuant to Item 4.02(a).