- Amended Current report filing (8-K/A)
February 26 2009 - 3:35PM
Edgar (US Regulatory)
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
CURRENT
REPORT
Pursuant
to Section 13 or 15(d)
of the
Securities Exchange Act of 1934
Date of
Report (date of earliest event reported): February 11,
2009
ABC
FUNDING, INC.
(Exact
Name of Registrant as Specified in its Charter)
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Nevada
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000-51710
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56-2458730
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State
of Incorporation
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Commission
File Number
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IRS
Employer I.D. Number
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6630
Cypresswood Drive, Suite 200, Spring, Texas 77379
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Address
of principal executive offices
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(832)
559-6060
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Registrant’s
telephone number
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(Former
Name or Former Address, if Changed Since Last
Report
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
|
o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Item
4.02
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Non-Reliance
on Previously Issued Financial Statements or a Related Audit Report or
Completed Interim Report
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On
February 11, 2009, ABC Funding, Inc. was advised by our independent
auditors that the previously issued consolidated financial
statements contained in our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2008 should not be relied upon because the financial statements do
not properly reflect the accounting of certain warrants as set forth
below.
While
preparing our responses to certain comments raised by the Securities and
Exchange Commission pertaining to our pending Registration Statement on Form
S-1, our independent auditors identified an error in the accounting for
stock warrants issued to our senior lender when we entered into our term loan
credit facility on September 2, 2008. The fair value of these
warrants was initially recorded as an expense under “Change in fair value of
derivatives.” Our independent auditors have determined that
the fair value of these warrants should have been recorded as a discount to the
related term loan and amortized over the life of the loan using the effective
interest rate method.
Our
CEO and CFO discussed this matter with our independent auditors and the
above described financial statements have been restated to properly account for
the issuance of the warrants to our senior lender.
The error identified by our
independent auditors affects only our consolidated financial statements
contained in our Quarterly Report on Form 10-Q for the quarter ended September
30, 2008, which Quarterly Report was amended on February 12,
2009. The correction of the error for the quarter ended September 30,
2008, resulted in a $9,822,364 increase in “Debt discounts” associated with our
term loan credit facility; a $9,822,364 decrease in the “Change in fair
value of derivatives;” and a $129,972 increase in interest expense, which
resulted from the amortization of the debt discount. We have not
experienced any other implications of the correction of the
error.
The effects of the
restatement on reported amounts for the three months ended September 30, 2008
are presented below in the following tables:
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Three
Months Ended September 30, 2008
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As Reported
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Adjustments
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As Restated
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Other
income (expense):
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Interest
expense
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$
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(1,167,454)
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$
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(129,972)
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$
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(1,297,426)
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Change
in fair value of derivatives
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(17,922,772)
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9,952,336
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(7,970,436)
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Total
other expense
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(19,209,983)
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9,822,364
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(9,387,619)
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Net
loss
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$
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(19,539,329)
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$
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9,822,364
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$
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(9,716,965)
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Net
loss per share:
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Basic
and diluted
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$
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(0.80)
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$
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0.40
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$
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(0.40)
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Weighted
average common shares outstanding:
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Basic
and diluted
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24,487,451
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24,487,451
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24,487,451
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September
30, 2008
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As Reported
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Adjustments
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As Restated
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LIABILITIES
AND STOCKHOLDERS’ EQUITY
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Credit
facility – term loan, net of unamortized discount of
$10,022,642
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$
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21,799,722
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$
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(9,822,364)
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$
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11,977,358
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Total
liabilities
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63,987,853
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(9,822,364)
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54,165,489
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Stockholders’
deficit
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Retained
earnings (deficit)
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(31,628,611)
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9,822,364
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(21,806,247
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Total
stockholders’ deficit
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(19,042,963)
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9,822,364
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(9,220,599)
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Total
liabilities and stockholders’ deficit
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$
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45,044,890
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$
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-
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$
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45,044,890
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated: February
26, 2009
ABC
FUNDING, INC.
By:
_/s/ Carl A.
Chase __
Carl
A. Chase
Chief
Financial Officer
EXHIBITS:
99.1 Letter
from Malone & Bailey, PC, independent auditors
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