The accounting mess at
Late Wednesday, the troubled e-commerce software company said an ongoing audit likely would result in "further adjustment" to its first-quarter financial results. No further details were given.
Those results have already been
revised twice, most recently on Tuesday when PurchasePro knocked first-quarter revenue down to $17.1 million from the previously announced $29.8 million. The company's net loss for the quarter also grew, to a whopping 23 cents per share, instead of the previously announced net loss of 2 cents per share.
PurchasePro didn't say when auditors would finish looking over the books, but the company has yet to file its 10-Q for the first quarter, running afoul of
Securities and Exchange Commission
rules. Until the 10-Q is filed, shares in the company will trade on the
under the symbol PPROE.
analyst Tim Getz wrote in a research note that PurchasePro's revenue revisions put his earnings estimates in doubt and meant he was no longer sure that the company would have the cash to reach profitability. Getz has a sell rating on PurchasePro, and while his firm has a recent banking relationship with the company, it no longer does underwriting.
The company's shares fell 77 cents, or 31%, to $1.71 in Thursday trading.
PurchasePro has remained rather tight-lipped about its internal affairs since the Monday
departure of Chairman and CEO Charles "Junior" Johnson. Speculation has arisen among analysts that the company, now led by Vice-Chairman and CFO Rick Clemmer and President and COO Shawn McGee, is trying to get out from under some controversial accounting procedures, most notably the practice of granting partners
warrants in exchange for revenue. The SEC has taken a rather dim view of this strategy in recent weeks.
PurchasePro has also been named a defendant in about 17 shareholder lawsuits. Johnson is also the defendant in a
lawsuit that claims he stole the business model for PurchasePro, a claim the company denies.