STUART, Fla., Dec. 10, 2010 (GLOBE NEWSWIRE) -- Liberator Medical Holdings, Inc. (OTCBB:LBMH) today announced that it would restate the Company's previously issued unaudited financial statements for the interim periods ended December 31, 2009, March 31, 2010, and June 30, 2010, to comply with certain accounting guidance that became effective for the Company on October 1, 2009. The changes are to non-cash items and will not affect the Company's reporting income, operating income, operating expenses, total assets, or cash position for the three quarters to be restated. The restatement resulted from the Company's reevaluation of the accounting treatment of certain convertible notes issued by the Company to a single investor in May and October 2008. The notes were converted into the Company's common stock in May and October 2010, respectively. The notes contained embedded anti-dilution provisions that could have led to adjustments in the conversion price of the notes if the Company had issued additional shares of common stock or like securities at a price per share less than both the conversion price then in effect and $0.75, which the Company did not do at any time after the notes were issued. Previously, the Company had concluded that these embedded anti-dilution provisions were indexed to the Company's own stock under applicable accounting guidance and that changes in guidance effective for the Company commencing October 1, 2009, did not change the accounting treatment of the embedded conversion features. After reevaluating the accounting guidance and the Company's accounting treatment of the embedded conversion features during its year-end audit process, the Company concluded that the embedded anti-dilution provisions were not indexed to the Company's own stock and, therefore, were embedded derivative financial liabilities that require bifurcation and separate accounting. Accordingly, the Company determined that it should have recorded a cumulative effect adjustment to the opening balance of retained earnings on October 1, 2009, and that thereafter it was required to adjust these embedded derivatives, as long as they existed, to fair value at each balance sheet date or interim period, recognize the changes in fair value as a non-cash charge or benefit to earnings, and record changes below income from operations in the Company's statements of operations.