Certainly not bad faith intent.. but it was a major over cite & cost us an 'e' for nearly a month.

5 yrs.. before the wrong methodology was caught.. Where was the Audit Committee?

The Company's consolidation of the financial results of Phoenix Digital Solutions, LLC was based on advice from the Company's prior auditors. Following discussions with the Company's current auditors, the Company has reassessed its accounting for its interest in Phoenix Digital Solutions, LLC and, after further consideration of FIN 46R, has determined that, rather than consolidating the financial results of Phoenix Digital Solutions, LLC, it should have accounted for its interest in Phoenix Digital Solutions in accordance with the equity method of accounting for investments. The change in accounting was the result of the Company concluding that it did not have a controlling financial interest in Phoenix Digital Solutions, LLC and was not the primary beneficiary of the relationship

Based on recent SEC guidance, the Company re-evaluated its accounting for its previously outstanding convertible debentures to determine whether the embedded conversion options required bifurcation and fair value accounting in accordance with FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities," and EITF 00-19, "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in a Company's Own Stock."

http://www.pinksheets.com/edgar/GetFilingHtml?FilingID=4652571

The new SEC guidance involved many companies restating their accounts, or should the Audit Committee be blamed for not anticipating a change in SEC guidance?

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Be well